So Poor, So Good
The abysmal report card of most state power boards, barring a handful, has translated into good business for the Indian UPS industry. The growth of the PC market in geographies beyond the metros and big cities, combined with hours of long power cuts and erratic power supply to homes, SOHOs, as well as industrial zones have led to a thriving UPS market, particularly in the under 5.1 KVA category. In FY 07, this segment grew by 37% in terms of units shipped, and 26% in revenue terms.

Traditionally considered a device to ensure power back up, the UPS is now being seen more as a power provider, an essential component of the business continuity plans of enterprises. Today, the UPS has evolved from being just a box to a solution. In order to sustain in a highly volatile competitive market, it has become imperative for vendors to offer and upgrade to the best possible technology. As networks are becoming more complex, far-flung and are managed from remote locations, UPSes need to be equipped with support for heterogeneous network management protocols and be flexible enough to incorporate remote diagnostics and predictive failure technologies.

Up and Coming
Being covered for the first time as a special section in the Dataquest Top 20 annual IT survey, racks and enclosures has become a crucial component of the basic infrastructure that supports IT. Therefore, traditionally the preserve of only a few from the unorganized sector, it has come to be valued by the big names in the business.

Even though almost 60% of the market comprises small players spread across the country, major players like Rittal, APC, Emerson Power (India), APW President, and Valrack are now emerging as strong competition.

Among the factors being actively considered by large enterprises necessitating good enclosures include: systematic power and cable management, the need for cooling, resistance from earthquake, need for security, and scope for adding additional hardware without any major disruption in work.

Over and above, as businesses grow and real estate prices go through the roof, enterprises are realizing the importance of optimizing space. They are looking for hardware which will occupy less space. This is where racks and enclosure come into the picture. Almost the entire set of IT and telecom hardware including PCs, servers, switches, routers and UPSes can be put in a systematic fashion in an enclosure, providing a neat working atmosphere. And, most solutions are vendor neutral.

Strategic Security
With the quantum of threats rising, and their nature and channel of delivery going through major transformation, the year saw the Indian Information security landscape going through rapid change.

Riding on the back of infrastructure expansion coupled with the growing demand for adherence to regulatory compliance, increasing sophistication of internal and external security threats, consolidation of various technologies/applications, the Indian information security market fell a little short of the thousand crore revenue markmaking Rs 956 crore in FY 07. Up from Rs 733 crore in FY 06, the growth was 30.4%.

Web-based threats escalated to become one of the biggest threat areas, driving the need for security in the mobile environment. As security issues pertaining to Web 2.0 and its associated technologies, sites, and services (that emphasize online collaboration, sharing and user-generated content) escalated to newer attacks in FY 07, the Indian security players focused more on Web-based security, graduating beyond the traditional security dictates. Coupled with this, convergence and an integrated approach marked the overall flavor in the Indian Information security space last fiscal.

No wonder then that network security accounted for the bulk of the market with Rs 453 crore. It got more integrated with enterprise IT. And demand for managed security, compliance audit, and certification pushed up the security services market.

Toward LCD
In the display technology space, even though CRT ruled in terms of units sold, there was a marked swing in favor of LCD monitors. The shrinking price difference between the two form factors is making LCD a more attractive option for both corporate and home users. Enhanced technical features and aesthetic appeal further helped sustain momentum. It was yet another year, which saw LCD monitors outpace the growth (in terms of %age) of traditional CRTs by a huge margin: LCDs saw a 153% growth while CRT monitors could only manage a 10% increase.

Of the total LCD market in India, 75% went for commercial usageincluding enterprise, education, and government. Industry surveys forecast that this trend will hold for the coming year. Industry insiders believe that the adoption of LCDs as first PC bundled monitor will exceed CRT next year in India. The Vista business opportunity too is expected to add a push starting from the second half of next year, especially in wide and large size form factors.

The contribution of LCD monitors to total monitor sales in the domestic market is close to 28%, and expected to touch 40% this year. LCD monitor shipments are expected to surpass that of CRT monitors in the year 2007-08.

Training Shifts
Training is one area that is beginning to see a very interesting shift, both in terms of markets as well as geography. Revenues from corporate training and overseas operations, especially in China, are changing the fortunes of the struggling Indian training industry.

The Indian training market seems to have got its rhythm back this year after a downhill slide from 2001 through 2004. Last fiscal, the training market was worth Rs 2,135 crore, up 46% from FY 06 which saw a total turnover of Rs 1,453 crore, and a 14% growth over the previous fiscal. Growth came mainly due to good business done by the two major playersNIIT and Aptechoverseas.

Individual training paled in comparison to corporate training, and continued to focus on providing skill-sets to the IT/ITeS industry. Fueled by the growth in hiring by this sector, increasing requirement for newer skill-sets and rapid changes in technology, this part of individual training witnessed robust growth. Plus, there were emerging areas like training on mobile phones and services for telecom channels.

Hardware and networking courses also gained momentum as both NIIT and Aptech got into this segment, and traditional hardware training players like CMS Institute, and Jetking strengthened their operations. There was big demand for animation courses, as Maya Academy of Advanced Cinematics and Arena added more centers.

The New Pillars
Continuing its growth run, storage once again emerged as one of the most lucrative sectors in the Indian IT industry, with pure-play vendors like EMC and NetApp emerging as market leaders. Business continuity planning, disaster recovery, and storage virtualization are the three pillars on which the foundation of the next wave of storage is being built.

The biggest catalyst to Indias storage story was definitely the exponential increase in the quantity of data being generated by Indian organizations of all hues and sizes. As per the Storage Networking Industry Association (SNIA), during 2006-07, only India witnessed massive digitization of data records (95% of data generated by enterprises is in digital form these days) and that data was growing at the rate of 60% annually.

The overall network storage market, constituting of SAN and NAS, grew by 63% to reach Rs 940 crore in FY 07. Coming in the wake of an 85% increase the previous fiscal, the numbers confirmed the growing trend among enterprises, SMBs included, to adopt SANs or at least NASes, or, increasingly, a hybrid model of both. The traditional DAS market continued to shrink. In FY 07 it fell for the third consecutive year, this time by 10%, to reach Rs 188 crore. The secondary storage market also witnessed a growth of 69% to reach Rs 248 crore.

Though it did not match the growth rate of network storage or secondary storage, at 40% even the storage software market showed impressive growth to reach Rs 185 crore. Continued customer spending on software for data protection, storage resource management and compliance helped to drive growth. Growth related to data protection, including replication, backup, and archive software, was an indicator of customers continued concerns (and hence growing spend on) about application availability, data management, and business continuity.

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