A Solid Edge For Product Design

A 2D drafting tool can no longer fulfill the designing needs of the Indian manufacturer. He is now looking for design software that offers much greater functionality in areas like modeling, surfacing and assembly. Although a variety of high-end CAD/CAM solutions are already available in the market, many of the fancy features bundled in such packages might not actually be required by most users. Moreover, a majority of manufacturers also want a cost-
effective solution. Therefore, vendors have discovered an alternate route-mid-range CAD/CAM software. "With 2D market dying down slowly, mid-range solutions will become an entry point for engineering organizations," says Alind Saxena, Technical Manager (North), Tata Consultancy Services (TCS).

Mid-range solutions like the Artisan Series from SDRC, Pro/Engineer Foundation from PTC, Solid-Edge from Unigraphics (being launched by TCS in India) and AutoCAD Mechanical Desktop (MDT) from Autodesk have provided the small and medium-scale users with a CAD-tool that suits their needs. It competes with low-end packages like AutoCAD on the price front and with high-end software on capabilities and performance. According to KP Unnikrishnan, Country Manager, PTC, the already existing users of high-end packages will continue to do so, but the market will grow at a very slow pace. "Users might go for a one-time huge investment, but the subsequent purchase will not be significant," he says.

The battle in the mid-range segment probably began with the advent of Wintel. Pentium II processors created a virtual explosion in the power of Windows NT systems. A PC-based software like MDT from Autodesk could incorporate many more applications to compete with any high-end solution available in the market. It could match Unix-based packages on many of the performance parameters, at very affordable prices. And further advancements are expected in graphics technology on the Wintel platform. "With the arrival of Pentium, CAD/CAM got ported on to Windows and customers expected a cost-effective solution with greater productivity. Till some time back all major vendors were not able to offer a solution in this market and were concentrating on the high-end segment. As the customers became more demanding, it was time that suitable products were positioned to address this segment," says Saxena.

Vendors like SDRC, PTC and TCS (Unigraphics) have plunged into the market with their mid-range solutions. But here they will have to tackle the virtual monopoly of Autodesk in the SME segment. It is more likely that an already existing customer of Autodesk will gladly upgrade to a solution from the same company rather than switch over to another one. "We are fully aware of the advantage that Autodesk has in terms of a huge installed base. It is definitely a challenge for us," admits Suman Bose, Business Manager, SDRC.

Apart from brand loyalty, most manufacturers who are using PC-based tools may not even want to invest in hardware that will be required for the shift. SDRC has found an interesting solution to tackle this problem. It has entered into an alliance with HCL Infosystems which is offering ‘free’ workstations with the Artisan Series. The company is attempting to address every segment with an entire range of solutions between Rs1 lakh and Rs5 lakh. Products from other companies are also positioned in a similar price range. Pro/E
Foundation is available at $800 and Solid Edge from Unigraphics costs Rs2.25 lakh.

Every vendor is working at a plan to promote the core competency of its product. Vendors of high-end products hope that their experience and expertise in providing technically advanced products will lend them an edge over Autodesk. Most of them have repackaged their already existing software and have removed some modules to create a mid-range package. Explains Unnikrishnan, Pro/E Foundation incorporates all of the existing Pro/E functionality for part design, and includes assembly construction and detailed drawing creation. In addition, it includes comprehensive sheet metal modeling capabilities, the ability to model and document welded assemblies and create photorealistic models of Pro/Engineer models. "The strategic
reduction of modules from 94 applications to 24 will streamline and simplify the current product line offering," he says. Unigraphics, on the other hand, has come up with Stream Technology that provides decision management tools to streamline problem-solving as well as process-specific features encompassing the modeling processes. Bose points out that high-end vendors have an edge against Autodesk as they are only repackaging their already existing solutions. "Autodesk does not have prior experience in handling high-end cases. Moreover, they will also have to invest in research to increase the functionality of their products," he says.

As the competition gets fierce, companies are becoming more aggressive with their marketing strategies. While PTC wants to rely on a direct selling model, TCS has decided to appoint quality resellers for its products. SDRC wants to cash in on the network of its channel partners like Samtech, Vectraform and Krittika for its sales and distribution. According to Bose, it would be unrealistic to believe that a company’s product will remain technologically superior. "Any new technology can be easily duplicated by the competitors. So, we are depending more on the strength of our channel partners and sales model for greater penetration," says Bose. The company has already sold 250 seats in the first four months after its launch and hopes that its recently announced incentives will further boost the sales.

Analysts speculate that in the near future mid-range products will occupy a major chunk of CAD/CAM market. "The low-end market would eventually fade away and a major portion of this market will go to the mid-range segment," says T Balaji, Sales Manager (North), TCS. While high-end software will continue to address the requirement of complex product design in a concurrent engineering environment, mid-range software will offer users a choice for not-so-demanding application areas at low price-point. Large users, too, will find it useful to go for a mixture of high-end and mid-range software to optimize their operations.

Shweta Verma,
in New Delhi.

Highway Smart

Sparsh Communications’ low-cost Highway Automation System is all set to revolutionize the logistics business in the transport industry.

Sparsh Communications’ tie-up with Bharti BT for around 500 VSATs hit the headlines last year. As by any means, a single Indian company placing an order for such a huge number of VSATs was mindboggling. Why should a company of Sparsh’s size need so many VSATs?

The Highway Automation System (HAS) software has been developed in-house by Sparsh Communications, part of the Hyderabad-based Rs900 crore Sanghi Group mainly into development of web-based products. The system uses VSAT technology and a variety of internet tools to track the movement of vehicles on highways. Some equipment for the project has been purchased from Scientific Atlanta and 250 VSATs have already been installed with another 150 in the pipeline.

Part of the infrastructure is the information kiosks at a distance frequency of every 50 km on the National Highways. About 266 kiosks have been set up so far. Information is uploaded on to the main server in Hyderabad through VSAT network. Each vehicle under purview is fitted with a small antenna and hence can be traced within a 200-300-meter
radius of any kiosk, using radio communication. The technology is one of its kind in the country and Sparsh is easily ahead of its competitors by at least one-to-two years.

However, what makes HAS attractive is the low cost of the services, which are pegged somewhere around Rs600 per vehicle per month. Considering that each kiosk is set up at a cost Rs18 lakh and the huge number of VSATs in use, the prices are indeed low. Says Sunil Parekh, VP, Sparsh Communications, "Many companies even from abroad are asking how we are able to offer the service at such a low cost."

Low prices are precisely where the success story of the project is. Says Rajesham, Chief Engineer, (IT&C), APSRTC, "In a country of distances where majority of cargo movement is through roadways, a low-cost vehicle tracking system could be a huge success." With around 30 lakh vehicles plying on the highways and the base growing at an annual rate of 21-22 lakh vehicles, Sparsh Communications is sitting on a goldmine.

The low-cost strategy is the fruit of years of labor, including good groundwork by the company. Sparsh has been on the job of preparing the user community for the past year, besides pooling in technology. Extensive testing was conducted and thorough market research done. Says Tiwari, VP, GATI, "There is nothing unique in the technology, it is the good basic studies that they have undertaken."

The system by itself facilitates, among other things, minimization of idling capacity and communication, besides reducing the chances of corruption. The big transport companies can directly login to the main server, as a copy of internal software is fixed at their end. "Through this system, the CM knows how many trucks are entering or leaving Andhra Pradesh at any given point of time," says Parekh, adding that insurance companies could be their biggest clients as the system enables them to tackle false claims more promptly.
However, there are many loopholes. The system is restricted to just the National Highways and ignores the remaining large stretches of roads. "There is also no provision for upgradation in HAS," says Rajesham, comparing the system with APSRTC’s own online communication links which it plans using VHF and GPS technologies.

Further, most of the processing in HAS is done at the back office and hence is at disposal only through
requisition. There is also no direct communication and for this, the
driver would have to rely on a long distance call.

APSRTC has offered Sparsh Communications an option of custom enabling the system to suit their requirements. "They have the infrastructure in place, all they need to do is venture into the other road segments apart from National Highways." APSRTC being a pioneer in IT implementation in road transport, association with them could immensely benefit HAS.

For the next six months, Sparsh has targeted one lakh vehicles and from then on, five lakh every year. Talks with GATI, BHEL and Godrej are expected to materialize very soon.

As for the HAS system, it offers ample scope for growth, both horizontal and vertical. Diversifying into other road segments could increase the client base for the product. What’s more, 40 other applications have been devised using the same infrastructure. But the biggest question is whether Sparsh Communications is geared up to face the challenge or not.

in Hyderabad.

Finance: The New Allure

But, with its current structure and the price slashes of PCs, does it really entice the buyer?

As the auto market picked up in the country, the finance com- panies saw in it another business opportunity. Hesitant buyers too saw in these schemes a good way to fulfill their dream of buying a car. And the effective cycle began-the financiers fed the industry and the industry fed them. Soon, these schemes found their way into the consumer goods market. And as the home and the SOHO segments became the darling of IT companies, the finance companies too made a beeline to capitalize on this growing market. And today, it has reached a stage where dealers present the buyer with an array of financiers they can go to for finance. There are also several schemes where finance companies have joined hands with vendors. And so one would expect the logic that worked for the other segments to ideally fit in here too, as PC buying grows by 35%, year on year.

However, the reality may not always necessarily subscribe to ideals. The schemes typically demand a high down payment and interest, by the end of paying which the customer has no guarantee that a better product will not be round the corner, making him feel that paying the interest was not worth it all. Also, it is structured in a way that a financier is cushioned even if the buyer suddenly changes his mind and goes for a rival product, which is more competitively priced. This makes the schemes attractive only for buyers who are clear about their system requirements.

The finance packages announced for iMac by Avco Financial Services and Countrywide Consumer Financial Services are a case in point. The
initial price of Rs85,000-a formidable price for an average Indian buyer-ends up costing much more with the financing. And so the question that comes up is: "Do I need the system that much?" If yes, then scheme or no scheme, he would probably have bought the system anyway. The scheme has just helped him relax a bit. That the schemes don’t necessarily boost sales is also evident from the fact that the sales usually don’t show an upward move following the announcement of a scheme. A fact confirmed by Sushant Bhatacharya of Godrej Pacific Technologies Ltd, "The schemes are not followed by the expected volume of sales. The financing schemes in the country lack maturity and are not attractive enough to pull the customer."

What these schemes, possibly, do achieve is shift a buyer’s decision in favor of a branded PC, because it comes with an easy payment scheme. While the almost close price-point between branded and unbranded PCs has to a large extent narrowed down the differences between the two sets of PCs, according to vendors, the final clinching of the deal may be because of this attraction of paying for the system in instalments.

Currently, in this era of constant price slashes and technology updates, these finance schemes can at best be viewed as a value-added service. The industry still regards it as a good way to attract the attention of an undecided buyer. However, that it will become a part of the IT life, where battles would be fought afresh through the schemes as an add-on service is clear. For instance, Compaq is looking at a tie-up with a finance company and planning a credit division in the Asia-Pacific region. Bigger names such as HP have their own financing divisions. HP’s Technology Finance division contributed Rs100 crore last year.

However, now the tough task at hand is convincing the buyer about the need to buy a system. Instead
of the finance schemes leading to
the boom, it could well be that the
PC buying boom would be the salvaging factor for these schemes. Once that happens, the finance companies would find in the IT industry yet
another golden duck. The ball, as
always, is back in the customer’s court.

in New Delhi.


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