Leaders are Winners

• Customer satisfaction level had grown significantly across six out of
  eight categories (exceptions are networking products and enterprise
  applications). Vendors seem to be connecting well with the CIOs
• Market leaders were the ones providing maximum satisfaction to customers;
  except Dell in notebooks and Oracle in enterprise applications, vendors with
  largest market share (according to DQ Top 20) led the show in six other
  categories
• HP undoubtedly was the #1 favorite among Indian CIOs, thanks probably to
  its wide ranging portfolio; it was #1 in four categories viz, desktops,
  servers, printers and enterprise storage. It was #2 to Dell narrowly in
  notebooks, but last at #6 in IT services. It did not participate in enterprise
  applications or networking (ProCurve)
• Except IT services where the two HCL entities (Infosystems and Comnet)
  followed by TCS/CMC bagged the top three positions, it was a dismal showing by
  Indian vendors in other categories (HCL, Wipro, Zenith, Ramco)
• Nortel was the only vendor (in networking) who scored the lowest in all
  parameters across all eight categories
• Dell recorded the biggest jump (3 places up in desktops) while Lenovo (in
  desktops) and Sify (in IT services) suffered the steepest drop (4 places down)
• Indirect selling through channels seems to lead to more satisfied
  customers; Dell was #1 in notebooks and #2 in desktops
• MNCs like IBM and HP might be bagging most of the marquee domestic deals,
  but they lagged behind their Indian counterparts at #6 and #8 (last) as far as
  satisfying CIOs is concerned
• EMC bagged the highest score across all categories in a single parameter
  (pre-sales & marketing in enterprise storage)

As enterprises tighten their purse strings and become judicious in the way
they spend each penny, there would be considerations other than cutting edge
technology and solutions on offer from competing vendors. Customers are
increasingly going to look at the way vendors go about fulfilling their needs,
not only during pre-sales or business pitching but also during and after the
solutions or products have been installed at their premises.

The dynamics of customer satisfaction is changing with the times. Gone are
the days when customers used to remain satisfied with basic minimum level
customer service. They want vendors to offer the highest quality of satisfaction
at all levels of their relationship with themsales & marketing, delivery &
installation, products/services, and post-sales service. Customers are now
asking for support in the medium they want and at the time they want. 24x7x365
is something which has become the norm rather than the exception.

In a Nutshell

Hewlett Packard has emerged as the top player in desktops, servers, laser
printers/MFDs and enterprise storage. Incidentally, HP is also a market leader
or among the top 3 in each of all these categories. But not all is good news for
HP. HP fell below last years ranking, in IT services and a notch below the
#1Dell in notebooks. Cisco is clearly a leader in the networking space in terms
of market share and also leads in the satisfaction scores.

In slowdown times, most vendors have focused on strengthening existing relationships to get deeper into the accounts than going after cold calling. The CIOs seem to be happy with the attention.

Of the eight product categories included in this survey, only networking
products and enterprise applications showed a marginal decline in customer
satisfaction

Most Indian vendors are still playing the catch up game when it comes to
providing customers satisfaction. Except for HCL Infosystems, which leads the
satisfaction rankings in the IT services category, other Indian vendors like
Zenith, Wipro, Sify, Ramco are far behind their MNC competitors. Indian vendors,
who theoretically are supposed to know the Indian customers better than MNC
vendors, have not been able to take advantage of this proximity and provide
better level of customer satisfaction. This goes to show that proven global best
practices have helped MNC vendors to have an edge over their Indian
counterparts.

Except for enterprise applications and networking products category, the
overall satisfaction scores among enterprise users have increased for all
product categories. On the desktop side, the comparison of satisfaction scores
across verticals shows a reduction in satisfaction level of the IT and ITeS
vertical, which is one of the largest segments for many vendors. Same is true of
servers, where satisfaction in the IT/ITeS vertical went down from 85.86 to
85.1.

On the notebooks side, the satisfaction score among the financial services
sector has shot up significantly from 81.99 to 87.9. Another interesting bit of
data on the notebooks category is the status quo on the satisfaction front in
the government sector. There is a less than marginal increase from 85.98 to 86.
This probably is showing complacency either on the part of the government
agencies or vendors or both.

In another finding, the government sector showed a decline in satisfaction
score from 89.58 to 84.5 with respect to enterprise applications. In fact,
except for the banking and finance vertical, others showed reduction in customer
satisfaction with manufacturing showing no change from last year.

IT services category showed a significant jump in the satisfaction. While HCL
Infosystems emerged on top, both TCS and IBM improved their rankings from last
year. On the other side, HP and Sifys rankings dropped. Oracle was #1 (from #3
last year) in the enterprise applications space, where it is the global leader
in terms of market share. In the enterprise storage space, Sun Microsystems was
displaced from number #1 to end up at #3.

Time to Make Amends

With the economy not in the best of health, the issue of customer
satisfaction will be in the minds of both vendors as well as customers. Vendors
will try and will, in all probability, go all out to keep existing customers
happy.

There is no doubt that enterprises are going to be strict about spending in
the coming year or two, but whatever they spend, they would expect more value
for their money and their appetite in terms of customer satisfaction will only
get bigger.

It is also time for most Indian vendors to grow up and improve their level of
customer satisfaction, to try and be match MNC vendors like HP, Dell, and Cisco
provide to their customers.

Another important dimension that is likely to be added in the coming year is
the challenge in front of vendors to prove their green credential. They have no
choice but to make their current and prospective customers believe that they are
really serious about this.

Sudesh Prasad

sudeshp@cybermedia.co.in

Desktops : HP Tops, Dell Shines Too

As the gap between the market share of desktops and notebooks narrow,
vendors are trying hard to offer value to desktop buyers through better customer
satisfaction

HP emerged at the top of the list, up from its second position last year in
the process dethroning Lenovo which slipped to #5. HPs management relates this,
in large measure, to the level its products are customized for the India market.
With this the company now has the distinction of being the largest player, not
just in terms of market share but also in meeting customer satisfaction levels.

Dell, which recently introduced indirect selling in India and chalked out its
channel strategy, was the biggest gainer replacing Lenovo as the #2 player.
This, as per the survey, was largely due to improvement in satisfaction ratings
on account of pre-sales & marketing, price & commercial, delivery &
installation, and post sales service parameters. Delivery & installation in all
probability got streamlined thanks to the Sriperumbudur, Tamil Nadu plant going
live with a capacity of 1 mn bringing down shipping time from three weeks to one
week. For Lenovo, the fall from grace at #1 to #5.

Though MNCs like HP and Dell ruled the roost and HCL kept the Indian flag flying, assembled players still scored high on customer satisfaction. It is significant that this segment enjoyed the confidence of 18-20% of the market. It held on to its last years 4th rank, indicating that there is still no alternative to personalized customer care. The dismal showing of Zenith and Wipro reinforced the near total marginalization of Indian vendors barring HCL.

Among Indian vendors, HCL managed to retain the #3 position, scoring
satisfactorily on delivery and installation parameters. Zenith and Wipro, the
two wooden spooners, merely swapped places at the bottom.

Customer satisfaction is not a choice, it is an imperative

What have been your customer satisfaction strategies? Arun Rao, country manager, business PCs, HP Desktops HPs strategy on Business PCs for increasing customer satisfaction revolves around increasing product quality significantly and providing a slew of value-added services that customers across the spectrum look for. In terms of product quality initiative, we put our products through extensive testing in our factories which includes: functional testing, electromagnetic testing, shock and vibration testing, operational and non-operational climactic testings. HP spends more than $3.5 bn globally annually only to improve product reliability and performance. HP has a TQM program that is designed to monitor and continuously try and improve quality. The key thing however has been that we engage with our customers very closelyand keep working on feedback and inputs that we hear from them. Many of the product innovations you see on HP PCs are due to this close relationship we have built with our customers over the years. What are the current challenges in attaining customer satisfaction? Customer satisfaction in these times is not a choice, it is an imperative. We have always been leading on this metricand this remains a key imperative for us as a company. HP has scored relatively less in the price & commercial segment. Is it because of the hike in price sensitivity, given the slowdown? HP is the number one PC brand in the country today. So, while we dont say we are the cheapest, all our efforts are around delivering the maximum value to our customers. Hence we are very price competitive in the market today. What are the post-sales services that you offer? Any new initiatives? We offer a number of post-sales services like repairs, servicing, etc. Of late we have added two more innovative post-sales services: data recovery and theft deterrence & tracing services. You have gained one slot in the desktop category to emerge at the top. What do you attribute this success to? It certainly feels nice to be at the top, especially in terms of customer satisfaction. At HP we constantly make the effort to deliver value to our customers. I would attribute our success to some major factors which we constantly work towards :staying close to our customers and listening closely to their feedback, and making continuous efforts to offer products and services that are customized for the Indian market. Mehak Chawla mehakc@cybermedia.co.in

Notebooks : HP Gets BeatenBy Dell

Dell and HP are the two main protagonists in notebooks too; only their
positions here got swapped

Dell had a clear cut edge over HP in pre-sales & marketing, which goes to
show that the hype created after the implementation of its indirect strategy,
has worked. Even delivery and post sales services have helped Dell in its good
showing in the notebook category. On the flip side, Dell scored the lowest on
price & commercial. It therefore needs to work on changing the perception of
customers on value for money, clarity of pricing contract, credit facility
received and total cost of ownership.

It was a very close race between all the top six vendors.

Customers gave a thumbs up to Sony in terms of its post-sales services,
resulting in highest satisfaction score on this parameter. Toshiba got the
lowest score in the product parameter. Acer was the worst performer in pre-sales
& marketing. Lenovo got the lowest rating on delivery & installation and
post-sales service.

Dells usurping the #1 spot has not been a mooth or easy ride. It owes a lot to internal initiatives like various surveys that captured aspects like purchase experience, tech support and customer care. Unlike desktops, total absence of any Indian vendor (HCL included) in the top 6 shows their lack of marketing teeth as well as propduct inferiority.

The banking and finance vertical proved to be the most satisfied showing the
maximum jump in satisfaction scores from 81.99 to 87.9. A very encouraging news
for vendors considering that this is the sector which has been one of the worst
victims of the economic slowdown.

Our customers build our products

Can you talk about Dells customer management model? We do it with a two pronged model. Within commercial we have the SMB, corporate and government. The corporate and government predominantly works through our direct model. We do a lot of internal customer satisfaction audits that help us capture the unique requirements of the customers. We do periodical customer business review for our top business customers. We involve all the stakeholders from our customer companies and not just the IT procurement team. The feedbacks we got out of these review sessions are enormous and critical for delivering greater satisfaction. In the last two quarters we have significantly deepened our customer relations by conducting road shows like Future of Computinga six city event aimed at delivering the roadmap for the CIOs in managing their IT infrastructures. Sameer Garde, country GM, Dell India Can you elaborate on these customer satisfaction audits Dell India conducts and the kind of feedbacks you get? We do various surveys that capture aspects like purchase experience, tech support and customer care. These surveys help us map the trends and the demands of the commercial customers. Indian customers are very demanding and RoI-centric. Given this our satisfaction audits help in delivering more feature rich products to customers. For instance, we started offering Linux OS in our notebooks after a section of customers felt the need for machines bundled with Linux. Similarly we also got feedback on the need for new security features that were also delivered in our products subsequently. We have also launched a website, ideastrom.com, where our customers give their product usage experiences and their feedbacks. In an extremely competitive notebook market what are the key differentiators of your product offerings? One of the biggest differentiators of our product offerings is the flexibility. The products are made to order and customers determine what they want. This nobody offers in the industry. Moreover, some of the post sales options like complete cover clearly differentiate us from the competition. Translating customer expectations into product features have significant impact. For instance, the option of backlit keypads, despite being a small feature, has a significant impact on users. Despite the advantages of the build-your-own-model, it takes some time to deliver the product, is this an issue? From our experience our customers have never complained about this. In order to get a product suiting their requirements, they are willing to wait a little. In the last few years we have also considerably narrowed down on shipping times. Shrikanth G shrikanthg@cybermedia.co.in

As per the IDC quadrant, vendors of notebook need to review their focus on
24x7 availability, better responsiveness in technical queries, value for money,
product reliability, timeliness of delivery and even overall responsiveness.

Like desktops, the other areas of concern include lack of proper
demonstration and training to clients, interaction with the service teams,
understanding of customers business as well as clarity of pricing contract.

Servers : Suns Loss, HPs Gain

A three horse race:though HP is #1, it is still too close to predict next
years winner

HP jumped two slots to dislodge Sun from the #1 position. Sun, on the other
hand, went down by two slots to finish #3. HPs ascendancy can be attributed to
the breadth of products and product affordability (Its x86 server range starts
from as low as Rs 25k).

According to DQ Top 20, 2008 HP has continued its domination of the server
space targeting 1P, 2P and 4P server category; and x86 blades gaining mindshare
had given it further filip. This has also been backed by good customer
satisfaction though as the results show, the gap with IBM is marginal.

Its a close three way race at the top between HP, IBM and Sun. The coming months would be a test of all of them on their green data center push as this is going to emerge as a major difference in the way customers perceive the offferings of the vendors. Apart from green, another challenge would be to offer server management capabilities to their customers in the light of new technologies like virtualization

In the price & commercial as well as post sales parameters, HP scored the
highest while IBM stayed ahead of HP in terms of product, pre-sales & marketing,
as well as delivery and distribution. HCL scored the lowest on product and price
& commercial parameters. Wipros performance was very disappointing with the
lowest scores in four out of six broad parameters.

Our 50% plus market share indicates our acceptability

HP has emerged as the top player in CSA in the server categories. What has been HPs mantra? Rajesh Dhar, country manager, industry standard servers, HP India We are a broadbased player and close to 75% of HPs server business is through partners. We feel that you cant be relevant to the entire market unless you have a product portfolio. The high-end products, blade and 4P, are value products in the x.86 category. Because most of our business is through partners, we need a very high ability to sell these product in the market. HP has more than 50% market share in these product categories and that could not have happened unless we had a very strong product. HP is behind its competitors in the overall product, pre-sales & marketing, and delivery & installation parameters? What would you say are the reasons for this? I do not agree with this result. This is contradictory to the market position that HP enjoys. We have a very strong pre-sales both within HP as well as at the partners end because most of our sales are indirect. I feel in value products, more important than marketing is that the product itself has to be very good and the channel ecosystem has to be enabled on the pre-sales activity. Our market dominance in blades and 4P wont happen if our pre-sales and marketing is not in place. This category is not as price sensitive as the 1P, 2P and 3P. What are some of the initiatives HP has undertaken as part of its customer satisfaction strategy? We have set up some POC centers and demonstration centers in Delhi, Mumbai, and Bangalore where we have all the high-end technologies which are associated with the x.86. We have also identified 25 partners each in in the enterprise and SMB space who have been given demonstrations of products to set up their own centers in their own offices. The enterprise set up is up and running and we are in the process of completing the setting up of 25 centers for SMBs. We have seen some blade uptake in the SMB space as well. We have also identified engineers and sales persons and trained them on new technologies like virtualization so that they can convey the right message to the customers. We feel we have the best products based on industry standards, which also reflects product stability and performance. Sudesh Prasad sudeshp@cybermedia.co.in

The reasons behind the growing dissatisfaction with Sun are its price &
commercials as well as delivery & installation. More precisely, clarity of
pricing contract and non-timely delivery and total time taken to initiate the
project cost Sun customer mindshare.

The IDC quadrant makes certain suggestions for the server vendors. It has
specified that the server vendors have paid too much emphasis on value for
money, product reliability, responsiveness and timely delivery but these factors
have not had the desired impact on customers.

It also advises that vendors should rather need to maintain clarity of
pricing, make spare parts available and provide credit facilities. Interaction
with the service teams, proper demonstration and training to clients as well as
understanding of the customers business and overall product functionalities too
need improvement.

IT Services : An Indian at Last

Indian vendors ruled the roost leaving the IBMs and HPs behind; though
MNCs won most of the marquee deals

HCL Infosystems, whose services business grew 43% last year (DQ Top 20, 2008)
to Rs 452 crore, has managed to live up to customers expectations. The fact
that HCL Infosystems displaced HCL Comnet from the top and the two occupy the
top two slots (followed by TCS/CMC and Wipro) should give a shot in the arm to
Indian service providers.

Its satisfaction ratings have improved due to better showing in parameters
such as service offerings, sales & marketing in the pre-contract stage, price &
commercial, and post-contract stage experience.

While both HCL entities scored high on delivery and installation, for Wipro and CMS it was status quo. Amongst Indian vendors, Sify was the biggest casualty, primarily owing to dismal performance in pricing & commercials as well as post contract services

HCLIs success could be attributed to some of the initiatives which took
place in the recent past. It has, of late, has started measuring SLAs. It also
organized 120 customer meets across India inviting customers to share their
experiences with the user community and take their feedback. They also focused
on skill building by opening up centers of excellence in storage, computing,
middleware and security. On the sales & marketing front, the company introduced
a series of solution oriented approaches instead of product oriented ones for
solving customer problems. It also launched solutions for medium sized corporate
data centers in one rack with remote management.

The ICT infrastructure is the heartbeat of our customer

As per CSA 2009, HCL Infosystems has done well on parameters such as overall sales & marketing, overall price, commercial terms, etc. What have been the direct initiatives of the company? George Paul, executive vice president, marketing, HCL Infosystems Within this organization, there is an urge to learn and improve and a deep realization that ICT infrastructure is critical to our customers and is their heartbeat; this is how our approach has been to services. The advantage and challenge is that we supply a whole spectrum of ICT services to customers including servers, printers, communication, etc. As per our CIO/CTO survey last year, we found out that customers were particularly critical of SLAs, therefore we now monitor production uptime on a monthly basis and have started measuring SLAs from this year onwards. We also organized 120 customer meets across India wherein we invited customers to share their experiences with the user community and take their feedback since service is critically linked to people involved. We also focused on skill building by opening up centers of excellence in storage, computing, middleware and security. In sales & marketing, we introduced a series of production solution oriented approach instead of product oriented, for solving customer problems since our sales people meet customers as consultants. On the production front we launched solutions for medium sized corporate data centers in one rack with remote management. On the price value parameter, however, the company has scored low. Your comments? I would only like to say that we could be more expensive as compared to the other players simply because we follow the direct model instead of the franchisee model. The services are provided by HCL engineers so automatically the costs run higher. A lot of your business comes from the government and defence verticals, how different is the billing model here? The billing model is the same for both the government and private sector. About two years back, we introduced transformation within an organization for leveraging our multi-technology prowess for a pan India presence. We now handle multi-location projects efficiently and are able to deliver on time. What is the service model of your company? Of late we have been configuring our services on what the customer feedback has been. Right from comprehensive coverage (we undertake complete responsibility for a customers infrastructure) to launching enterprise remote services. We also have a concept called Bring In Service wherein customers can bring in their products to the service center. We have a host of models like managed services, SLA-based services. For production support, customers usually prefer fixed price model while for infrastructure support, customers opt for core fixed price model topped with service packs (which could be time-based). Stuti Das stutid@cybermedia.co.in

The combined success of HCLI, HCL Comnet and TCS/CMC following at #3 show the
mindshare Indian service providers have managed to create among Indian CIOs.
Contrary to popular perceptions, the IBMs and HPs might have bagged some of the
larger deals, but Indian vendors have been able to satisfy Indian enterprises
better.