Cover Story

New player in town

Sahara Computers and Electronics has set itself the target of selling 1,20,000 PCs and notebooks by March 2006. Atanu Kumar Das reports.

Sahara Computers and Electronics (SCEL) started its Indian operations on June 4, 2005 when it launched six desktop PCs, seven notebooks and five servers. SCEL is a partnership between Sahara Computers (pty) Ltd and Sahara India Pariwar. Sahara Computers is among the top IT vendors in the African continent. SCEL is expecting to close its global revenues at $400 million by December 2005.

SCEL has sold 3,500 units of desktops and laptops since its local launch, and is planning to reach 1,20,000 units by March 2006. Of this target, the company expects laptops to contribute up to 20 percent. As of now, SCEL has 140 employees and seven branches in addition to its head office located in Delhi. Its manufacturing facility is in Noida. The company presently has 40 engineers, a figure which is being upped to 1,000 by March 2006.

According to George van der Merwe, Chief Operating Officer, SCEL, “The market which we have entered is huge, and we want to adopt both conventional as well as unconventional methods in our approach to selling our desktops and laptops. Today, both these products are no longer luxury items but utility products.”

The company is keen on targeting the government sector and is offering laptops and desktops to some organisations at “throw-away” prices, to raise the profile of the brand. “I can’t mention the names, but we are trying our best to have our products displayed and used at as many places as we can,” van der Merwe adds.

It has also acquired SES Technologies, which is the largest Indian-owned distributor in the country with over 5,000 channel partners. This acquisition will boost SCEL’s visibility and performance. Today, the company has 150 channel partners who are primarily concentrated in North India. It plans to have 900 partners of its own by March 2006, apart from the 5,000 of SES Technologies.

Price range

SCEL has priced its desktops between Rs 15,999 and Rs 40,000; laptops are priced between Rs 27,999 and Rs 1,20,000; servers are priced between Rs 38,999 and Rs 4 lakh. The operating system (OS) used in the desktops is Linux, but customers can opt for Microsoft Windows as well. In laptops, SCEL has offerings based on the Sempron, Celeron, Centrino and Turion. The Turion version, which is yet to be rolled out in the market, will be priced at Rs 41,999. In the server category, they have offerings based on Athlon, Zion and Opteron chips. All these models of desktops, laptops and servers are divided into value, premium and professional series which differentiates the type of customers buying their products.

In desktops, the company’s 64-bit AMD product priced at Rs 19,999 is doing the best. In the notebook category, the AMD Sempron model is doing good business; it is priced at Rs 33,990. “We have seen that customers in India want value for money. In the last two months, we have also sold 30 servers. Our entry-level server model is doing well, the reason being that this model is positioned to cater to the needs of smaller enterprises. These companies are cautious because they can’t spent large sums, but once they realise the value we offer in our sub-40k server, the adoption starts,” van der Merwe says.

India has a population of 1.1 billion, but most vendors are competing only in the 3.6 million market space. We want to change this and go beyond. We want to create our own market space George van der Merwe Chief Operating Officer SCEL	The Indian PC market is in a phase of robust growth; companies that are going to succeed are those that have the best post-sales as well as pre-sales support Sanjit Sinha Senior Manager Hardware Research IDC India

Employee Partnership Programme

An unconventional route the company has adopted is tying up with large conglomerates and offering them desktops and laptops through their Employee Partnership Programme. SCEL has recently tied up with one of the biggest first-generation Indian companies, and they will be offering notebooks at special prices in 18 locations of the company. It has also almost clinched another deal with an oil and petroleum major in India which will boost its visibility. “We are following this model to enhance our visibility as we have been late in entering the market. The potential is so huge that we can grow at a steep rate in the initial phase of our journey,” van der Merwe comments.

According to Sanjit Sinha, Senior Manager, Hardware Research, IDC India, “Smaller players are definitely going to make a difference in the market. Vendors such as Fujitsu, Sony, Samsung, LG, Ingram Micro, HCL, ACi and also Sahara have come up with their notebooks. All these players [together] are definitely going to have more than 10 percent market share in the near future.”

Sinha believes that as the Indian PC market is in a phase of robust growth, companies that are going to succeed are those that have the best post-sales as well as pre-sales support.

Sub-40k server

SCEL is planning to tap small and medium businesses with their server series. “In India, there is a large small business market, and corresponding opportunities which can be tapped. I believe that by launching the sub-40k server we will cater to most small businesses. For medium businesses we have two other servers suitably priced to suit their pockets. We also commit that post-sales support will come from our end...this is one of our unique selling propositions,” states van der Merwe.

The company has appointed dedicated channel partners for its server business. “We will be having around 100 partners who are being appointed to promote our servers in the country. I feel that if we have dedicated partners who are associated with SMBs then our business will grow at a faster rate. Moreover, we also want to enter the enterprise space as we have two models catering to this segment,” van der Merwe says.

The company is planning to sign up more channel partners in the next two months as it feels that servers are one of the fastest growing segments in India and their reach could be extended to rural India as well.

Upcountry sales to boost business

The upcountry market is going to be an area of focus for SCEL. It will try to leverage the huge presence that Sahara India Parivar has in B- and C-class cities. “The reason for the tie-up with Sahara India Parivar is their strong hold in rural areas as well as metros. Once we partnered them, we had access to the 1,700 branches that Sahara India Parivar has in this country. This meant that our brand visibility is going to be one of the best in this country,” van der Merwe remarks.

He believes that upcountry markets will buy the value series as it is priced competitively and offers quality with post-sales support. SCEL thinks that the penetration of desktops and laptops has been minimal in B- and C-class cities; the company also wants to tap the state government market. “We know that the government sector in India is huge, so any decision to buy products such as desktops and laptops always ensures that they get the best product at a reasonable price. We believe that we fit the bill and could offer them the best solutions available in the country,” van der Merwe says.

The company is also planning to appoint dedicated channel partners in B- and C- class cities. “We plan to appoint around 600 partners by March 2006, and most are going to be in B- and C-class cities. Moreover, with the acquisition of SES Technologies, we will have some of their 5,000 partners located in these cities,” van der Merwe adds. The company is also open to acquisitions in the future.

Products to come

SECL has also launched plasma screens, five-in-ones, MP3 players and digital cameras. Three models of digital cameras offered are priced between Rs 6,500 and Rs 15,000. The MP3 player is priced at Rs 5,000. “We have launched these products to raise our technology visibility in India. Although our primary concentration is in IT products, these devices are also going to play a pivotal role in entertainment,” van der Merwe says.

The company plans to launch more models of notebooks and desktops over the next couple of months. Discloses van der Merwe, “We will be coming out with more models of notebooks and desktops so that we can expand our market reach.”

The road ahead

According to IDC, the overall market for PCs grew by 32 percent in Q4 2004. The trend is expected to continue over the next couple of years. This being the scenario, opportunities for companies like SCEL are immense.

van der Merwe sums up where the company is going, “We want to be the leader in this country, and will do whatever it takes to get there. If we can boost the computing market in rural areas, I guess we will be successful in our vision. India has a population of 1.1 billion, but most vendors are competing only in the 3.6 million market space. We want to change this and go beyond. We want to create our own market space.”

atanu@expresscomputeronline.com