Hass, Executive VP (Asia Pacific),

Siemens Nixdorf Informations Systeme AG.

dt.jpg (12106 bytes)The head of Asia
Pacific, Axel Hass is responsible for Siemens Nixdorf’s operations in 17 countries
across the region. The company has been maintaining its growth rate in the
region–that of over 100 percent. And last year too it did 107 percent sales despite
the sharp decline witnessed in IT growth rates from the region. Hass, who sits on the
board of directors of Siemens Nixdorf Informations Systeme AG, is the man behind Siemens
Nixdorf’s Asia-Pacific growth. And he is the one who has managed it ever since the
company ventured here. In an interview to DATAQUEST in December 1996, Hass had said:
“We are open to the idea of using local capacities.” Let’s find out what he
had to say on his company strategy at the recently-held CeBIT’98. Excerpts:

SNI had a very impressive beginning
in the Asia-Pacific. Has there been a slowdown in the company’s growth of late?

For the first two years, we grew at a rate of 100 percent. In the last fiscal year, we
achieved a turnover of 850 million DM. This year our growth in the first five months in
Asia-Pacific is 27 percent, which I think is good. With this, we would be able to achieve
the target of 1 billion DM by the turn of the century.

You have oft said that you are
looking at forging strategic partnerships in the Indian market. But you still haven’t
gained enough ground in the area of forming relationships. What are the reasons for the
slowfooting approach in India?

We are not slow. We have to adapt ourselves to the market and do what we and market can
absorb. We are still looking for strategic partners in India. This is an ongoing exercise
and we will continue to do the same. So far, we have achieved whatever we had wanted.
Slowing down is a normal activity and is a phase in every business. India’s slowdown
is related to the developments in the Asian markets. India still has the growth rate
comparatively better than the other Asian countries. The turnaround in this market is
difficult to predict but will come with rest of the Asian countries.

The Indian PC market has become a
battleground for foreign brands such as IBM and Compaq. How do you think SNI will fare in
this battle, especially in light of the company launching an ad war to combat Compaq?

We are number one in Germany and fifth in Europe. The biggest market is the PC. In India,
we are responding to the market needs and doing what our distributors are demanding. This
gives us an equal opportunity to compete with any other brand, whether it is Compaq or
IBM. Of course, our product is good and so is our strength as it has been proved in
Germany. And that is the thing which the customer realizes sooner or later. Well, our
focus of business is on high-end market. However, in India, a huge market exists for the
medium range PCs. Since we have a wide range of products and because of the opportunity,
we are focusing on that segment, and so the price war and the ad war. Corporate market,
however, is the focus area of SNI and we are offering products in that market. We are not
quiet. We are equally aggressive in that segment.

SNI is trying to enter into Unix
and NT markets in India, while worldwide it is making a strong bid for NT markets. What do
you think will be the trend in the Indian market?

India is strong in Unix and has a strong orientation for Unix, as different from the
worldwide trend of Windows NT. We can show world records of our performances in Unix.
Hence, seeing the need we are offering solutions for both ends of the markets–Unix
and NT in India.

What has been the fate of the NetPC
that SNI announced at Dublin last year? What have been the shipments and what is the

It’s too early to comment on the fate of the product. We are also not saying that
NetPC will replace PCs, but in the era of Internet it is a wonderful product to have. The
technology and the philosophy behind the product is good. And at times, there are
strategic confrontations with the new product, which if the product is good goes off.

Given that Internet is becoming a
major factor in all IT vendor strategies, how is SNI planning to factor the Net in the
future strategies of the company?

To get the new users and new ideas, SNI is also focusing on that area, making it simple
and fast. Our C-LAB has developed a PC solution that enables the blind to surf the net.
That has good market potential and we will continue our efforts to tap the same. But we
are not software companies like Microsoft, Netscape, etc. that can make money as much they
want to on the Net. We are looking at specific markets and already have some products
targeted at those markets.

Till last year, you were
predominantly seen as a German company. Do you think you have been able to change the
focus to become a global company?

We have a lot of local content. We are strongly on our way to become a global company. We
have offices in 17 countries in Asia-Pacific and a total of 58 countries across five

How is SNI planning to tap the
emerging telecom market in India and will the activities be centered around SNI or

Yes, telecom is a big emerging market. It certainly will be our focus. We already have two
big customers, i.e. Reliance and Hexacom. I think working with each other is better than
doing it from a single point. The activities will go where they suit most.

You have Siemens Ltd and SNI in
India. Is there any plan to merge the two in the near future?

SNI in India is an offshoot of Siemens
Ltd and Siemens has stake in it. We are happy with the present structure and have no plans
to merge in the near future.

Most big companies are going
through a process of mergers and acquisitions. Why is this happening now? Do you think SNI
will also look to acquire some key technologies in the near future? What about the impact
of Compaq-Digital merger on SNI?

The mergers are required to grow and it certainly helps both the companies. We are also
keeping our eyes and ears open. Any merger which stimulates our growth will be good for
SNI. Talking of the impact of the Compaq-Digital merger, we go up by one position. There
will be no major impact as Compaq will remain Compaq and Digital as Digital. Digital will
never be Compaq.

Most companies are worried about
the continuous state of insignificant growth that Europe has. What is the chief reason for
it and what will be the impact of this phenomenon on the fortunes of companies such as
SNI, which are predominantly European?

Some of the European markets have a growth rate little behind. Still, we are maintaining
the double-digit growth. There are a number of factors responsible for this, starting from
market potential to company focus. For SNI, in fiscal 1996-97, the sales in Europe region
excluding Germany, grew three times as fast as the IT market as a whole. The contribution
to these countries increased to almost 40 percent of European sales. SNI will concentrate
in particular on those lines of business which promise significant growth rate in each
country with the aim of becoming one of the three largest vendors in the respective

What opportunity Euro conversion
offers to the markets such as India and how do you think we can tap into that opportunity?

India has a huge manpower and cost advantage. And it has been successfully handling Y2K
problem. I have also seen some of the companies focusing on Euro currency. They have the
big opportunity. Euro can be tapped in a similar way as Y2K.

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