Back to the Future
merging’ as a word has different connotations for different people. Some feel offended when getting tagged with the term-they often feel that they have done enough in their respective domains to have ‘emerged’ and calling them ‘emerging’ still is condescending. There are others though who feel proud to be regarded as ‘emerging’-they take it as an acknowledgement of their potential and the possibility that tomorrow they will become leaders.
There were similar considerations before us at DQ Channels while compiling the list of the Gold Club Solution Provider 50. While the Top 50 lists of distributors are more clear cut, there is always a grey area about the parameters on choosing the Solution Providers 50.
Revenues not being the only yardstick, the choice assumes a much more subjective nature. The kind of work these players are doing, what they are attempting and what potential they have to grow in the future, becomes important.
Revenues has been another area where we have been more flexible this time. While we have provided revenues, the companies have not been ranked on that basis. Also, while most of these players are still low on toplines, you will find certain companies who should have been in either one of our Top 50 lists according to their turnovers.
Either their information reached us late, or we were able to track them down later. There are chances that while their overall toplines might be high, the kind of work for which we are acknowledging them might still be not so significant. So one should not feel surprised or offended to see some of these ‘apparently emerged’ companies in the list.
Another interesting facet is that half of these emerging companies are not from metros or large cities but from far flung places like Sangli, Surendranagar, Guwahati and Udaipur. That again proves what I have been asserting for years that Indian IT’s real growth now is taking place only in tier-3 and tier-4 cities.
Over the past few years, tier-2 and tier-3 cities in India have shown maximum business potential and more or less every distributor and solution provider responded to the call by increasing their upcountry networks. These markets are already signaling signs of maturity attracting these companies to be more active towards generating higher business growth from the Indian upcountry hinterlands. Understanding the growing potential of smaller towns beyond the T1 and T2 boundary, the vendors too are now paying more attention to go deeper and capture these untouched markets.
With time the scalability and nature of projects delivered by these solution providers have changed drastically. They have started taking up and delivering large scale and more complex projects for their customers, a capability neatly built over time and with much effort. Some of them have also started actively venturing overseas. Geographical expansions are must now as there are various unexplored territories with lots of opportunities and it is up to the solution providers to explore the same as much as possible.
One particular domain where most of these emerging players are starting to make a mark is with SMBs. The IT challenges of SMBs are inherently different from that of large enterprises. In fact, these challenges often end up being far more complex for SMBs purely because of the restraint that has to be exercised by them on the budget front and on various other issues like server space, what model to go for, vendor management, getting the right skill set, etc. To add to these, while a typical SMB in a tier-1 city shall still have someone on the lines of a CIO, the mid sized organizations in tier-2 cities and further down may not even have an IT department.
Add to this, in organizations in smaller towns, these problems get further magnified; in addition to lack of skillsets, an overall lack of exposure to the modern technical and business updates virtually make IT a non-starter for most of them. There is a wide gulf in maturity between the metros and other tier-1 cities with the hinterland. The issue of digital haves and digital have-nots get ruthlessly exposed here. This definitely puts more responsibilities on the shoulders of upcountry partners-not only are they focusing on these SMBs merely to generate moolah, but they are performing that role of IT evangelists to build an overall tech ecosystem there.
As the delivery portfolio and efficiency enhances, so does expectation and competition. To sustain and thrive in this business it is very important to follow the current market trends and upgrade skills on regular basis to catch up with latest technology and develop solutions around them. Services is an area wherein one has to provide end-to-end solutions to his clients. Therefore, continuous evolution is essential and its now up to these emerging companies to see how fast they can shape their way to join in the big league.