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Archana Venkat

Chennai, Aug. 10 Hewlett-Packard’s (HP) foray into the small and medium business (SMB) segment is reaping rewards with the company seeing as much as about 50 per cent growth every quarter (1,000 new clients every quarter to its 75,000-strong clientele), particularly in the manufacturing segment.

Manufacturing accounts for 74 per cent of HP’s SMB and Enterprise Business and demand for ERP, CRM, basic office automation tools and security solutions are driving growth in this vertical.

“We are seeing such demand for these solutions from Tier-II cities such as Coimbatore, Madurai, Salem and Tiruchi, that growth target of 50 per cent seems conservative,” Mr Ashok G. Pamidi, Director-Commercial Accounts, SMB and Enterprise Partners, HP, told Business Line on a recent visit to Chennai for inaugurating a HP proof of concept centre.

According to the company’s estimates, there are 10.2 lakh companies in the SMB segment with scope for information technology deployment. Of this, HP has about 75,000 clients (hardware and software). The SMB market in India for hardware deployment is estimated at $3.86 billion.

Privatisation, government regulations and the need to be globally competitive have forced SMBs to adopt technology. Also, as large manufacturing enterprises set up shop in Tier-II cities (such as Biocon setting up a manufacturing unit in Visakhapatnam), local players want to match their efficiency levels and are hence deploying technology on a large scale, he said.

Though these companies may be small, the average IT deployment deal size is about Rs 10 lakh, up from the few lakhs a couple of years ago. Interestingly, companies seem to be opting for notebook/laptop-based solutions as opposed to the older desktop based IT deployment systems.

“We are seeing a trend in SMBs moving to the ‘thick server-thin client’ model,” Mr Pamidi said.

In such a model only the ‘deliverable’ part or front-end of the IT application is available to employees, whereas all the processing, memory and storage happens at the server, which is in a central location. This results in reduced cost of software maintenance, upgradation and power as upgrades can be made once at the central server and automatically transmitted to all client machines.

While HP’s new clients are opting for the thin client model right away, close to 16 per cent of older ones are moving from the existing desktop-based heavy front-end systems.

The company has also introduced niche business solutions under four new categories – product life cycle management, education (which involves niche ERP solutions for university management system), non-banking financial sectors (solutions for businesses involved in trading, chit funds and securities) and film and video.

“SMBs want niche products for their needs. For instance, university management systems needs ERPs with capabilities to integrate laboratories, libraries, administrative work and also offer scope for high performance computing that will cater to their research needs. We are using data mining techniques to find out such new requirements to offer dedicated solutions under new categories,” Mr Pamidi said.

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