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ADC Krone - A niche player

February 15, 2007

India's rapidly growing telecom industry, along with the exponential demand in bandwidth, has resulted in a sharp increase in the demand for telecom infrastructure across all industry verticals.Indian enterprises are looking at advanced technologies for operational efficiencies, higher profitability and faster growth. This need has spawned a huge market for network infrastructure products.

With large telecom players attempting to differentiate themselves in terms of services, gigabit and terabit routers have gained popularity among Indian customers.New broadband applications such as video conferencing, video-on-demand and interactive learning require routers to route data according to the application.

At the same time, intelligent cabling systems have also gained momentum in India. Enterprises are demanding cabling products that deliver standards compliance, reliable performance and backward compatibility.

As a result, a number of companies including Molex, Tyco Electronics, Systimax and ADC Krone have carved out a niche for themselves in the field of network infrastructure products and services.

ADC Krone, with a market share of 6 per cent, is the fourth largest player in the Indian structured cabling market.This market has registered significant growth at a compounded annual growth rate (CAGR) of 25 to 30 per cent over the past couple of years. It registered a profit of Rs 108 million for the financial year ended October 2006.

Headquartered in Minneapolis in the US, the company's annual revenue in 2006 was $1.3 billion, of which 41 per cent came from outside the US. The revenues from India accounted for 1.2 per cent of the global revenues.

The company has set up a new development facility in Bangalore that can accommodate up to 350 people. At present, ADC Krone has 140 people in Bangalore who are involved in research and development, business process outsourcing and enterprise IT applications. It intends to double its headcount in Bangalore in the next two to three years.

About 100 product lines of ADC Krone's networking and telecom equipment are manufactured in Bangalore mainly for the Indian market.

ADC Krone's wide array of products for enterprise networks include data centre solutions, power over Ethernet (PoE) solutions, Category 5e/6 cabling solutions, 10G Ethernet over unshielded twisted pair (UTP) solutions (CopperTen), work area solutions, fibre solutions, cable management solutions and media conversion solutions, among others.

The CopperTen system is the world's first UTP structured cabling system with the necessary characteristics to enable 10 Gbps Ethernet transmission over a full 100 metres of UTP cable. ADC Krone was the first to launch the 10 G UTP cabling solution in India in 2004. The solution was very successful with eight installations in the first year. It continues to enjoy a dominant share of the market.

In 2005, the company tied up with eSys Information Technologies for the distribution of its enterprise solutions and the related enterprise portfolio. "We aim to expand our market penetration throughout India with a special focus on channel in B and C class cities," says K. Balachandran, managing director, ADC Krone India.

The coming year will be one of channel development for ADC Krone. With a focus on expanding into new geographies, the company plans to appoint more channel partners and also improve the existing partner relationships.

"Currently, we are working with about 150 certified system integrator (SI) partners in India. We are looking at doubling that number in terms of both quantity as well as quality. We are working with one national distributor and five regional distributors this year who help us take our products to our customers," says Balachandran.

The channel initiative apart, ADC Krone is ready with a slew of new products to be launched this year. "On the enterprise side, we will focus on data centres for which India is becoming an important market," says Balachandran.

Focusing on data centre infrastructure capabilities, these products will include racks and cabling guides along with the existing products. "The focus is on providing intelligent physical layer management solutions for large enterprises and helping system administrators through better access and monitoring facilities. The key focus verticals will be business process outsourcing and IT-enabled services, banks and financial services institutions, education, government, defence and the builder community. Larger enterprises apart, we will also look at catering to small and medium businesses by equipping our medium-sized SIs with adequate capabilities to deliver," adds Balachandran.

Within the telecom space, the company's Tower Mounted Amplifier solutions enable wireless carriers to get more from their networks as they serve multi-band antenna applications. Its wireline offerings include Wi-Fi solutions that offer a low-cost and easy-to-deploy approach for building a network of Wi-Fi hotspots.

Hence the company's focus will be on designing and delivering solutions based on technologies that lend themselves to active infrastructure sharing, in line with the government's agenda.

Clearly, the sharp increase in the demand for bandwidth, coupled with the market growth in structured cabling, has had an impact on the increase in large network deployments.

Moreover, IT-driven enterprises such as data centres, knowledge centres, business process outsourcing outfits, and disaster recovery centres are fuelling the growth of this market segment in India.

As bandwidth-hungry applications are deployed, they are pushing the limits of data transmission on the LAN. In this scenario, ADC Krone, with its varied technical solutions, is a player to watch out for.
Rasika Chandihok


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