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Comsat Max finds growth by adding value
Huge geographical spread, low teledensity and a strong
demand for reliable communication infrastructure have meant that VSATs are a
natural choice in India. However, VSAT service providers are no longer positioning
VSATs only as a connectivity medium but are looking at new revenue streams like
disaster recovery and broadband Internet access to push growth.
Srikanth R P looks at Comsat Max, one of the leaders
in the VSAT space, which has successfully managed to transition itself from
a pure-play VSAT service provider to a value-added service provider
Around two years ago, when colourful fibre optic cables
were being laid across the country in humungous numbers, most analysts predicted
the demise of the VSAT industry. The reasoning was simple: The bulk of VSAT
vendor revenues came from providing connectivity to corporates spread across
diverse locations. It was predicted that fibre players like Reliance who had
the reach could cut prices and offer connectivity to these corporates at a fraction
of the price that VSAT players charged.
Though most VSAT players dismissed the fibre optic
threat, saying that India Inc. would still need VSATs as a back-up option, they
nevertheless started looking at other value-added services as additional revenue
streams. Additionally, players like Comsat Max realised that they had the potential
to sell more services on their base of installed VSATs.
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It made sense for Comsat Max to diversify its range
of services as it already had in place infrastructure spanning 17 points
of presence (PoPs) across India, says Sudipta Sen |
Says Sudipta Sen, CEO, Comsat Max, “It made sense
for us to diversify our range of services as we already had the infrastructure
in place—spanning 17 points of presence (PoPs) across India. Today, the
move has paid off and we have seen an increase in value-added services. More
importantly, we have increased our range of services.”
Change in strategy
Knowing that value-added services would hold the key
to growth in an extremely competitive industry, Comsat Max started formulating
a blueprint for the value-added services space. Accordingly, a plan called HPDM
(host, protect, deliver and manage) as conceived, which would offer every conceivable
service for the corporate user.
As Comsat Max already had two enterprise data centres
(EDCs) and a network spanning 17 PoPs in India, it made sense for the company
to start looking at providing hosting services. Clients too were keen on using
Comsat Max’s hosting services since it not only enabled them to get a one-stop
solution for their needs but also lowered their cost of ownership. For example,
Eicher, which has around five businesses, consolidated all its IT applications
and these applications are currently hosted on Comsat Max’s servers. The
hosting service has taken off in a big way and currently Comsat Max handles
more than 50 clients, hosting mission-critical applications like ERP, CRM and
SCM. Security is another big sector that Comsat Max is bullish on. Under this
segment, Comsat Max offers a host of services like managed firewalls, authentication
solutions and the company even frames security policies.
Having invested in enterprise applications like CA
Unicenter, Comsat Max started looking at opportunities in the infrastructure
management space, which is estimated at a massive $126 billion. Sen believes
that remote management of infrastructure is the next big opportunity for India
Inc. and Comsat Max with its knowledge of hybrid networks is well poised to
exploit the opportunities in this space.
To illustrate the concept of remote management, Sen
gives the example of ITC’s e-choupal that consists of a network of 1,200
Internet kiosks in villages spread across 18 Indian states. Says Sen, “We
are managing the network remotely as it is difficult to update these devices
onsite.” Sen believes that players like Comsat Max with their India advantage
could garner a huge piece of the infrastructure management market as the outsourcing
wave gathers momentum.
Another large segment that the company is seeing huge
demand in, is disaster recovery (DR) services. Besides traditional sectors like
banking, financial services and insurance (BFSI) and telecom, Comsat Max is
also looking at tapping the ever growing ITeS sector, which cannot afford to
face any downtime. Says Sen, “The ITeS sector depends on the volume of
calls and access to records on a 24/7 basis. Any downtime can be detrimental
to their business. We see a huge demand from these sectors for DR services.”
Comsat Max has also smartly positioned its DR services
like an insurance policy—the disaster recovery premium is linked to the
type of disaster recovery solution recommended. Depending on the requirement,
customers can choose different service levels, with recoveries ranging from
instant recovery to within 24 hours.
Conclusion
The transition of Comsat Max as a pure-play VSAT service
provider to a player offering an entire range of value-added services can be
seen from the fact that today value-added services account for 20 percent of
the company’s revenues—up from almost nothing around two years ago.
Sen is now looking at hitting the Rs 500 crore mark in revenues (from Rs 70
crore currently) in the next five years on the back of value-added services.
For a VSAT service provider which analysts believed would be threatened by fibre
optic networks, clearly the move into value-added services has paid off in a
big way.
srikanth@expresscomputeronline.com
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