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What's Hot! (Contn.) B2B IT
EXCHANGES Transacting IT products on the Net doesn't need a qualifier: it just makes perfect sense, expressed in dollars and cents, pounds, shillings, and pence (due apologies to Roger Waters). Taking the lead from a booming market in the US, a few Indian players have occupied the neutral marketplace for buyers and sellers of IT products. And they claim to be doing brisk business. Just six months after it was launched, 01markets.com is believed to have transacted business worth Rs 15 crore. Another site, Smartsourceit.com, says it bagged India's biggest-ever online order for infotech products: 100 desktops (worth Rs 55 lakh) for HDFC Bank.
A few basics first. The marketplace for IT products-split into the SOHO (small-office, home-office) segment, the SME (small and medium enterprises), and the corporate segment-is largely fragmented. This is not unique to India: most hardware products are sold through multiple channels in the Asian region. And with layers of intermediaries, the gross margins are a wafer thin 5-7 per cent. This is where the sites-like smartsourceit.com (promoted by IT&T), itnation.com, 01markets.com (Wipro), and cyberitmall.com-step in, promising to do away with the layers of intermediation under a neutral platform. On the face of it, channel conflict is not a major stumbling block in this sector. The revenues for the sites will be a percentage or a commission per transaction on the site. Other revenues could be the so-called value-added services that the sites claim to have. Says Hemant Kohli, CEO, IT&T: ''We saw an opportunity here in terms of cutting the inefficiencies in sales and overheads by using the Net. It's a viable and an extremely profitable model.'' That it sure is. But with online commerce in the doldrums, it's a long road ahead for most it exchanges. Staying power and scalability is the key. -Aparna Ramalingam TRANSACTIONS Good old-fashioned trust seems to be in fashion in the quicksilver world of e-commerce. Two international providers of business and credit information-Dun & Bradstreet and Coface-have trained their international stamps of authenticity on the Indian market. To start with, Dun & Bradstreet-with a database of 150,000 Indian companies-has entered into a service alliance with Indian b2b site indiamarkets.com. On offer is its d-u-n-s system to validate the authenticity of transactions on the web. Going a step further is France's Coface Group, which provides credibility checks and credit insurance through their rating service '@rating'. Coface is in the country through alliances with itnation.com and Chemb.com, among others. Indian companies have traditionally shied away from doing business online. Now that they can verify and authenticate the business credentials and risk profile of potential partners, will they move on-line? -Abir Pal CYBERABAD
Lucent and Microsoft are not alone in picking Hyderabad as a base to set up R&D facilities. Ericsson, Motorola, Portal Player, Nokia, Cyberbills, and Netplane have already made R&D investments in the region. ''At operation costs that are around 20 per cent less than, say, in Bangalore, Hyderabad has a definite cost advantage at the moment. But more significantly, I see emerging R&D clusters in the high-end technology areas like chip design and telecom R&D. There are, for instance, already close to a dozen chip design companies here,'' says J.A. Chowdary, 46, President and Managing Director, PortalPlayer, which is conducting research in the area of digital signal processing. Most players seem to have been attracted by the low labour costs and investor-friendly picture of Hyderabad. ''The city was a natural choice for us, after having found Bangalore very crowded and Delhi too expensive,'' says Drew Hoffman, 45, President and CEO, Arista Soft, working on areas of e-commerce, application integration, operation systems, and implementation tools. Hoffman is convinced that it is possible to ''grow Hyderabad operations while minimising costs''. For the moment, at least, other R&D shops are agreeing with him. -E. Kumar Sharma Back in internet time, early 1996
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Is Hyderabad a growing resource base?
Perhaps. Over the past two years, one it major after another has set up
R&D facilities in Hyderabad, particularly in mobile- and
internet-related areas. The recent example is of the networking giant
Lucent Technologies, which has set up its Bell Labs Development Centre in
the city. At the same time, a team of 30 software professionals has been
working on jump to .Net-the Java User Migration Path to Microsoft .Net-to
develop tools and technologies that integrate Java seamlessly onto the
Microsoft .Net platform for the past two years from Microsoft's India
Development Center, Hyderabad. ''The best part is that all of this is
being done from India with 90 per cent of the team consisting of people
hired in India and many straight from the campus,'' says a visibly excited
Srini Koppolu, 41, Managing Director, Microsoft India Development Center.