The Hindu Business Line : BA Systems makes use of India’s cost advantage

BA Systems is less than three years old, but the American company is taking on giants such as Cisco and Juniper Networks with its low cost networking solutions, thanks to its India advantage.

The company, which has a manufacturing facility here, claims it offers products at 30 per cent lower cost, and even 50 per cent less if it is an end-to-end solution, when compared to its competitors, according to Mr B. Jagadish, Vice-President, Sales and Marketing, BA Systems.

R&D unit

Cost of a low-end router (for a software application) could range between Rs 1 lakh and Rs 3 lakh. The cost could be Rs 4 lakh to Rs 20 lakh for high-end project that involves installing multiple networks for intranet, wireless and external connections, he told Business Line.

BA Systems, which has a research and development centre in Bangalore, started production in May 2006 through contract manufacturer Avalon, a subsidiary of the US-based Sienna Corporation, located inside the Madras Export Promotion Zone. Two production lines are available for BA Systems, Mr Jagadish said.

Networking market

The market for networking, including router and switching, in India is around Rs 13,000 crore. The enterprise networking space is around Rs 400 crore, and BA Systems is targeting a 10 per cent market share in this space in the next three years.

It partners with channels, including systems integrators and service providers to go-to-market, he said.

Market share

Cisco has a market share of around 90 per cent, while Juniper Networks, Nortel, Tasman, Huawei and 3Com are the other major players in this segment in India.

However, “Neither Cisco, Juniper or anyone else has such a facility. Most of them source their products from either China or Taiwan. This gives us a competitive edge over others,” he said.

Funded by Silicon Valley investor, Bessemer Venture Partners, BA Systems’ products are deployed in ‘mission-critical’ networks at banks, telecom companies, stockbrokers and BPOs.

Clients

Its customers include some of the Taj Group of hotels, VSNL Chennai, STPI Fortune Financials, Bosco Steel, BNA BPO and Divya Systems. The company will tap railways, airlines, telecom and defence sectors in 2008, he said.

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