T&M Industry in India : FY14 continues to hold promise!

NEW  ERA post realignment of lead player and Rupee Stabilisation
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The announcement in September regarding Agilents spinning off the T&M part is raising different expectations in the market.Usually these sort of announcements involve the acquisition of channel
on the ground,or renaming of business through the Manufacturer directly. Ths time around both the
organisation and the layered channels on the ground will need to be reoriented.The manufacturer cannot claim to "inherit" the channel automatically.The headquarters team has travelled to various regions but not
much in the public domain is shared. Only generalities like Growth and Leading Position in T&M is mentioned.

Today is the last day of Agilent fiscal is  there.They will like to go to the Security Analyst with better figures,as eventually the company in the new avatar will be listed on the Street.It is even more important from the new companys point of view as the T&M had been a zigzag business over the last decades,yet they have always maintained better operating margins.Accused of growing other businesses by the profit of T&M side
this had been usual story since long.So a company only involved with Spectrum Analysers and Oscilloscopes might turn out to be better.

Trust the FY14  will bring in better things to the industry and stability returns in India and Global scene.
Happy Diwali in the meantime.

T&M Industry in India : FY14 sees much upheavals as forecasted!

T&M  Industry upheavals as we are almost half way mark this decade. Much of this was forecasted
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in the begining of the 2010
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The industry Globally has had another development in that the "leading brand'  is going another split.
Agilent will be spinning off the EMG business in to another new company dedicated to the original
T&M group business minus the Communications/ATE type  business. This portion is slightly shy of
3 Billion USD  and it needs to be seen how it is going to be organised in various subsidiaries like that
in India /Asia Pac  region.Many  challenges on  Customer Sat,Competition,Channel and Cost Envelope
collaterals will occur as the things transition to un-named new outfit.

The T&M business from original HP fold till today has had many transitions and transformations. Many distributors,channel partners and customer facing organisations have come and gone. Yet the long term
channel partners have either been part of the Blue Star  field people in one form,offshoot or the other.The
organisation has been able to operate as well oiled machinery through the decades inspite of several titular changes.This has been possible due to great emphasis on Field training,Customer Satisfaction and Customer Education Elements in face to face Selling and Support Activities. I trust this will continue to guide the T&M
sales force now- whatever the title of the new Company.

While we will  track the activities of these organisation changes in subsequent blogs -through the rest of the decade- the Global T&M directions on the technology and dynamics of AsiaPac will influence very remarkably the India business planning. The Exchange rate parity to the USD, current  Account Deficit, US positioning in India Defense Business, Political Alignments in North East Asia and Asiapac will determine the
course ahead. Right now we can hope the Industry Leader will show enough maturity,forebearance and Strategic Architecture so that its positioning gets better here, in the decades ahead.We remain very Optimistic to the incoming new Leadership.All the very best to T&M Industry in India now!

T&M Industry in India : FY14 can target the offshore set Engineering Centers!

Spotting T&M opportunities in  a Slowdown atmosphere
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There are sweetspots of growth possibilities in the Indian T&M sectors even in our traditional market segments.We need to be a little selective here.Defense, Telecom and Aerospace are the big sectors but facing some delays in big deals closure.But the way India Practice for overseas Engineering Majors is going there are possibilities of opening opportunities.

More and more overseas companies are flocking to India for high end workoutsourced  to India.If we just pick the niche segments of Semiconductors,Telecom Software and Consumer Electronics the T&M required for research and Engineering Test can be our area of exploration.

A big picture perspective is the Engg Services exports out of India is around 16 Billion USD and some superb technology companies are operating-out of mainly in Bangalore/Hyderabad/NCR.The industry reports say companies like Ruckus Wireless,Ricoh and many others are expanding the product engineering or R&D verification testing out of these centers.Usually these companies give their initial work to big India outsourcers,but as they gain more India experience,their own work as well as their overseas partners work gets contracted to smaller niche companies.But for T&M industry both type companies are the potential customers.Software and Telecom verticals are biggest, but others are also significant segments for T&M players to pursue.We will share some success stories in that in these blogs.Keep watching!

T&M Industry in India : Fy14 triggering creation of Product Startups galore!

Local Design & Manufacturing push through the central scheme of Incubators
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Hardware or Hardware/Software startups were a term almost forgotten in a country so submerged with IT/ITES  companies.There seems to be a fresh lease of life for extincting hardware industry and Product
creating organisation.Usually the cycle of Product-Service-Integrated Product and then the Hardware Product again is the norm. We are seriously lacking that evolution because of no incentive to innovate or
feeding designs to the local manufacturing industry.This is one of the major reason why Indias components
and assemblies industry is highly import intensive.It could top Oil imports in another twelve years!

Incubating these budding startups through a deliberate policy and backing them up with infrastructure and academia environment of  Delhi University and BIIIT  is a master stroke played by the Department of Electronics and IT.The aim is to create 200 successful product companies and 50 Semiconductor Companies.It envisages Rs 3-10 Cr funding into a typical design/manufacturing firm employing modest 15 employees.Some sort of Public-Private partnership will happen where the designs will be created and technology for mass manufacture will be created with local IP. For a smart T&M company this represents a
huge opportunity over this decade.

These investing companies can spend Capex related to the design, verification, software validation,microprocessor development and  target integration activity. The T&M companies can spread their wing proactively by Educating them on Con-Current Engg, Embedded Engg Tools, Project Management and Shared Services related to Rapid Prototyping etc with Testing and Calibration infrastructure. A generalised  "Unsolicited Proposal"  can be created,and shared with the Chief Product Architects of these companies well ahead. Some kind of influence can be exercised by sharing the design data bases available commercially as well. A Global hookup with small pure Design-Only small companies can help as well.The applications will be in areas where the India Demands are high for Active and Passive Assemblies. Examples can be Telecom ,Industrial, Process Control and the Integrated Assemblies for Defense and Utilities.

It is expected that we will have potential of Rs 500 Cr of  T&M hardware and associated app software and services over the decade.Besides there will be annuity market for T&M and Engineering Services needed by these companies.Additionally these companies will help create big manufacturing companies producing their designs leading to more T&M Portables and ATEs in their production lines. Go T&M...Go.

T&M Industry in India : FY14 big developments can impact us!

Over last three months or so many things have happened to Global  tech industry with potentially large impacts to India. Proliferation of  Big Data technology in various areas of operations, Big Ticket Acquisition of  Telecom giant Nokia and finally Big Fall in Rupee value particularly against the US Dollar are events concerning India and the users based out of India.We will try to visualise different scenarios arising out of this turn of events and see how our T&M industry can cope with and if possible turn any challenges to some sort of opportunity for growing the Economy and the Employment generation activity here.

The events really cross the two major sectors- Computations and Communications industry.Today the ability of a particular technology is getting constricted by the processing of big data generated by the sensors,devices and networks in operations.Both the pipes and Devices are handling huge amount of data flow through them.Its leverage through systematic analytics, processing and interpretation and watch is important to all-from marketeers to Security apparatus and Policy Planners.Since sensors and networks alongwith devices are involved role of the T&M  instruments and Systems become critical. This will get manifested in new protocols,and also the linkages to the various OSS/BSS  extracted from these Networks.
Likewise the acquisition of a Mobile Devices Company by OS vendor (who will own several Patents of inheritance and now new Nokia wealth)  will change the game of competitive space in such convergence.Again T&M space will impact the proper integration of Hardware and Software so that the costs are managed well here. It just so happens that the stakes for both Microsoft and Nokia feature phones primarily  are very high in India market !

Lastly but perhaps most significantly for Indian users, the Rupee price realisation for these personal devices and phones,or any gizmo designed at the intersection will change drastically due to Global Currency movements,affordability by mid and new users.Even the attrition and churning of big partners ecosystems will impact number of feet on the street one way or the other.We will see in subsequent posts what T&M industry can do to cash the opportunity due to these developments? Watch this space. 

T&M Industry in India : FY 14 can strike Synergy of Components & Instruments !

The fiscal and current account deficit has been steadily increasing over last three quarters.This has been putting pressure to the Indian Currency against the major Economies currency,particularly the US$.Most of our major imports in high technology are pegged to Dollar and so the Indian Rupee is particularly in a tough situation. Imports of Electronic Components- both passive and active devices are expected to touch 350-400B $ in the next few years.Major markets of  high technology components is Industrial,Automotive,Defense,Telecom and Manufacturing across various sectors of the domestic economy.Naturally the requirement of foreign exchange to the Capex and Components will be increasing as the Rupee tends to depreciate. The T&M Capex -majority of which is also Dollar Denominated also gets under budget stress likewise. If the same purchaser is involved, the double whammy happens when both the T&M and components orders are to be placed.

One creative way the saving and rationalising of foreign exhange  can be done is by the proactive planning of procurement of both capital and revenue items.Suppose the Capital items and the revenue items are needed for the same manufactured product,and the different schedules of Components are required at different stages( initial prototyping, phase one, two of productions etc) the orders can be combined and negotiation for pegging exchange rate can be done at a rate acceptable to buyer & supplier. The supplier can ask buyer to fix this for buying a hedge from the bank,and seller can time his deliveries suiting his buyers production schedule. A sort of exchange rate neutrality can happen if the two parties work closely. Off Course there has to be better coordination between different procurement personnel of the big buying organisation too.The idea is arriving mutually at a common agreed rate.

Another side advantage to suppliers is foecasting better the timing of capex purchase as the equipment will normally be used to test the assemblies/systems after they are assembled etc and so both the deliveryskeds and order timing are synchronised for win-win exchange rate. Sounds tough,but tough measures needed for tough times like these.

T&M Industry in India: Independence Day eve thoughts in FY14

Approach  large Geographic Spread in  Defense, Telecom, Railways & Healthcare Ecosystem
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This Independence Day  Eve  the mood is one of  relection and review and not so much of Celebration and big Joy because of  prevailing  conditions of  general  slowdown  and policy
anxieties. In last four months or so, some policy initiatives  on local manufacturing ( Cluster Manufacturing ) and Semiconductor JV have been initiated  to pump up the market though.This
should  pep up the local economic activity eventually, past the bureaucratic hurdles of approvals
and clearances.As an outfall the T&M industry ,at least the Global one should benefit.

Likewise on the local manufacturing and assembly of Smartphones ,a definitive big step has happened by both the local manufacturers and the giant International OEMs. We have also seen small
MNC firms moving in India through the FIPB approvals on technology /Defense side and some modest activity on the aerospace SME side too. All this will help the T&M Capex involved on the manufacturing and factory floor testing projects. The similar things need stepping up on the Railways related technologies where getting niche technology from abroad and developing locally should be relatively easier ,less Expensive to set up and no of end units to be consumed in Indian Network are high.

I think the Apps driven Economy catering to sectors like Medicare, Healthcare and Public Health Systems Delivery is huge and underpenetrated as the leverage to big numbers hasnt been realised here.The success will depend upon mass development of local apps and finding mobile and Tablet hardware platforms to ride on.A combination of startups, IT integration capability, Domestic market for social sector and Government incentivising coupled with venture capital can be the boost.Real benefit will however come if we get fair amount of FDI as well as the local capital to invest. I will
continue writing on these opportunities in succeding posts too.

On a Personal note, I had been getting lot of encouragement from different quarters (friends,past colleagues and industry veterans etc) to register thoughts here.However more recently our Roorkee
Class of 1971  has been reconnected -in the virtual world - to reboot my enthusiasm. To this E&C
batch ( 1967-71)  at University of Roorkee  I dedicate this blog. Happy Independence Day !!


    

T&M Industry in India : FY14 should reinvent "Total Solution" in our industry.

In India T&M industry and all the vendors are having very unique situation where the Word "Total Solution" is being used more as a cliche, whereas the dilemma is how to manage it in our conditions for better customer satisfaction and internal companys competitive advantage.All this requires the vendors to have unique skills and strategies how to present a value proposition & Execution.

The fist requirement is to think through and define their Business broadly enough so it has objectives flexible enough covering portfolio of products and services for yielding different revenue streams.Rather than being unnecessarily too niche,like Communication T&M ,simply say Broadly the T&M ! The approach of aggregator becomes tenable,if these vendors are flexible to tie as a Partner with other companies.This naturally comes to those companies who are open, and transparent  and most importantly customer service oriented. Services of all kind wraped around T&M will be good
thing to have in our quiver.

One of the most important thing is how easy it is to do business  with us and our companys staff.Web based facility can make that differentiation.Can he pay by Credit card? Online interface possible?Credit terms need many layers approval,or the frontline staff fully empowered! Ultimately all this will determine both loyalty and Customer Advocacy for our company and brand.How much we have stayed well with customers in the past will determine how much more loyal they will be in future.

Customisation and localisation will be other requirements of mobile nature of anytime access customers, and we need to be equipped with our processes and systems to respond to the customer.A hard brick-and- mortar like business in T&M really requires to be changed drastically.We will discuss some T&M specific work processes needed in the blog posts to follow.Will FY14 see some of the things making a T&M vendor responsive of all this? Interesting isnt it?

T&M Industry in India : Can FY14 provide a new paradigm to us?

PERSONAL  TV, PERSONAL COMPUTER, PDA, MOBILE DEVICE EVERYTHING PERSONAL than why not PERSONAL  T&M?  Why not  then per capita T&M ?


Decades back whenever I used to travel in the country side for selling the T&M instruments a peculiar curiosity used to get better of me. In this country of low GDP and personal income are sophisticated instruments with top Electrical specs to boast are really needed.Our generation had a very modest earnings and if you had a "four figure salary"  it could ensure you recieve matrimonial proposals.Over the time this feeling really was relegated to back burner and we got on our usual job to selling,beating quota, tackling competition and so on.

With the arrivals of liberalisation the ninties really saw the supply side constraints loosening up and we started shifting to an era of abundance and newer cheaper technology getting available.We saw the personal Discman, the personal gaming console and lot new personal technologies products which were getting to prosperous general populations. HP had also introduced a platform Personal Instruments (PI) from our important instruments factory that time.The product was later withdrawn for some reasons unknown to the field.But it created my above mentioned curiosity deeper and even stronger in intensity.

Later working as the CEO for Asiapac south in another competitor company ,we brainstormed among the senior Strategic Leaders Meeting why we shouldnt evolve a concept of quota setting to each of our Asian Country based on population ! This was wild, particularly for two giants with 1Billion plus population each............................We from India and China were naturally excited but internally scared as Sales Manager in us came to the fore ! You see our raison de tre was meeting target and we were not interested being termed as under achiever,if we didnt meet those" astronomical" numbers.

However now seeing in the hindsight this is not a very wild concept.India has subscriber base of 90 Cr mobile subscribers and the smartphone percentage growing every week,all sort of mobility,broadband injected, Tweets,Apps and Blogs becoming order of the day why cant be have a personal smart instruments getting embedded in this 4G or later 5G device! And if that is so why we cant have our sales target of T&M instruments set as a complex multiplier of our population? Will this FY14 create this new paradigm?? 

T&M Industry in India : FY14 impacts Aerospace,Defense,Security related business!

DEFENSE CONTRACTORS, INCUMBENT & NEW PRIVATE  AND OTHERS


We had covered the Defense and Aerospace related discussions in several earlier blogs in details.With what is actually happening to the Indian economy on ground today, a quick review is in order.The severe twin defecits of CAD and FiscD, sliding Rupee,Mounting Short term debt to both GDP and total debt rising etc have impact on the buying power of technology products and services to the ASD sector of the country.We need to workout both short term and long term operational plans to tide over these difficulties.A good amount of pragmatism and fiscal prudence is needed to have balance between operational valour and valet.

We need to see the big picture first.Current size of the Global ASD industry is more than a Trillion Dollar and growing till 2018 at 5-6% or so. The Indian maintenance,repair,overhaul and auxiliary services market for both Mechanical/Aeronautics as well as the marine/electronics part can be easily 3-4 B$ in 2016-17. Now what we have to ensure is under the present economic conditions how we maximise the procurement through indigeneous sources-local supplies,manpower and indegenisation bypassing the impact of Re slide. The exercise will require analysis and taxonomy details of the materials and services.A close coordination will be required between Defense Contractors, Services IPC wing, inspectors and vendors associations. This can be a little complicated as different agendas can be at work.This is where for ASD sector, role of Defense Offset Authority of India can come in.Idea is to save FE in procurement and strategise reduce,reuse,repair and recycle wherever possible.

One of the way this can be done is segregate projects related to Electronics /Technology intensive programs first.Electronics is all pervasive in Radars,EW, Avionics, Communications,Electronic Security and allied gear.We can also review the Big Ticket top 20 procurement programs maturing in the ensuing fiscal. In coordination with the OEMs and offset agencies we define and outline program where we can achieve approx 10% more indigenisation than budgeted/planned earlier.This will help us stay even-keel with pre-slide Re level too.The contracts can be then awarded on fixed price basis for FY14. Longer term off course we need to go for more FDI, local investment and massive SME and MSME participation of local entrepreneurs in the sector 

T&M Industry in India : FY14 must segregate Torso & Tail customers!

It looks like we are having the right focus on the deals which may be emanating from big Global Manufacturers downstream projects fanning out to India.In fact we covered the strategy to just follow the balance sheets of large EMS/ODM type accounts in asia and tracking them to local units here.I think some mainstream accounts will get covered that way and without difficulty we can generate business for manufacturing test systems,or even PXI based modular customised ATEs there.The OEMs related to telecom are also being pursuaded to produce goods locally as per the new policies of DoT (NTP 2012) and the cluster manufacturing policy of the DeITY.

A real critical part of covering the geography as vast as India is small and medium to large industries or assembly projects of Electronics nature.Here a simple policy should have three elements : Cover to Compete and then Close deals.Small R&D based single product small manufacturers are thousands of them in area of Components,Energy,Materials,Healthcare and Automotive Electronics.The modern jargon in marketing is " Torso" and "Tail"  type customers.Here the combination of a pull and downstream calling by the company is required,where the deal size can be small but otherwise rewarding-due to faster close cycle and the IGM on the deal very high usually.

Much of the pre-sales effort can be mass customised for this purpose and modula instrumentation based on new PXI can be useful here.With one survey,it is estimated that we may be having approx
150,000 or so suspects in the country.We can take ideas of the kind of solution which can go there,from some geographically spread accounts in Energy Meter industry,or capacitor manufacturer.
Segregating and separate focus on tail particularly is important because over the time they will graduate to the "Torso"  status and their own growth will drive T&M industrys growth too!.

T&M Industry in India : In short term too it is LTE in FY14 !

Since 2012 when several networks in the Continent and the US adopted going to LTE format of one kind or the other , several questions arose on the T&M applications and what were the testing solutions available that time? These questions are not answered even 80% as primarily the nature of the network is still evolving,the standards still getting the template and the 4G infrastructure and devices tethered on these networks are ramping up on various providers.Today, hoever it looks that the operators are settling for a particular version of LTE, local standards are being written as well as the particular standards writing body is fine tuning on various network elements as well as the MIMO scheme. Depending on where your location home base is, the local 4G operator is seeing impact of new age T&M on the network as well as the sensitive T&M manufacturer and developer is releasing versions for LTE test.

The major change here is because of the fact these networks have come away from the TDM/ATM
domain and is following the IP side.The data intensive networks are getting IPified and so the intelligence is more prominent here.So, the thing is Signalling part is changing from AcceSS7 to newer type eg Diameter Signalling in the LTE. The voice is receding on the background as more and more data is riding the devices and the network.Wherever Voice is still to be carried for the Economic Reasons and customer retention,Schemes like VoLTE or CFSB are coming to the fore.So testing these LTE networks impact the testing process and type as well.Besides Signalling,Voice and the Protocol testing other T&M impact happens in the Radio Network interface tests,Conformance testing on the devices and high data rate tests.

Internet address explosion and high scaling therein, the migration from Ipv4 to Ipv6  is also another testing challenge.The compatibilty for IPv6 compliance is necessary as the addresses outnumbe networks ability and special purpose testers will be needed here.The networks in India are supposed to be TDD type with Adv version of LTE eventually to follow.Devices manufacturers like Samsung are now a little sure to have local line of Smartphones in India.A clutch of home grown phone manufacturers are aggressively scaling up the presence, so in the short term too it is Long Term Evolution in India.Couple of mega deals on LTE testing are signed up.Follow this space for more.

T&M Industry in India : FY14 looking for Cash pile Manufacturer?

While the North India is currently sizzling with heat, the T&M industry is wanting to have some major clues for growth in the Enterprise segment and more clearly for test automation related opportunities for big Deals.We covered the environment and where to look for specific opportunities in Deployment, Defense projects etc in earlier blocks.The challenges are very many right now and we need to wait for clarity there.These things in Govt Procurement can always take time and need focussed effort there.Likewise the big PSU manufacturers in Defense and Telecom are also driven by the Capex releases from the concerned ministries.

One very good perspective from Global Telecom and consumer Electronic Manufacturers  come when we study their current "Cash Pile" on their balance sheets. Just scan the East Asia in particular,like Taiwan and Korea and chaotic place like China. See how much cash is piling up.Hon Hai Electronics, Samsung Electronics and host of  smaller manufacturers have 40 B$ and approx 20B $  cash/equivalent on the balance sheets! Normally these mega manufacturers will either do buyback of their shares,acquire new companies, or announce big offshore plans or simply shift to a better tax efficient location.Very clearly Sriperembdur, Noida and some other locations in the West India need to be our hunting ground to help them spend on capex and T&M systems.

Some of these accounts are captive for large Global players.But many of the manufacturers are vendors to Apple,Samsung and Hyundai Electronics.And these vendors will like to move to India for getting closer to the manufacturing system.How much they will be able to release in FY 14 is ultimately the effort of T&M vendors calling on them and selling their respective value proposition.Asia ,Manufacturing, Multi Country offshore plant locations and CASH PILE are the words having the right nexus here.
 

T&M Industry in India : Mapping the Procurement Professionals mind!

We continue to face major Economic pressure points today ,as our Current Account Defecit and fiscal deficit remains high.Our ability to fund the populist Government schemes is highly limited and the ratio of external debt to the GDP mounts because of tepid growth quarter over quarter.We have hit to the 10 quarters low as far as the growth deceleration is concerned.Imagine this country is like a typical Company where our growth is getting highly dependent on the external factors of our Sales booming and so the Profits must improve depending on better execution of orders and efficiently managing the cash and all costs-variable as well as the fixed.Likewise our capex and opex are maintained at a level to derive the better reasonable return on our equity/assets. Today this is under severe strain because of deficits on the trade account as well as the fiscal account.Only Growth can tackle these problems like Sales turnaround helps in a Sales Organisation.

This is what leads to the basic question of Growth in sales coming because of Leverage,and Asset Productivity.Our T&M companies in India have huge asset base in terms of smart and youthful manpower.Many of these T&M companies,particularly the MNCs and their channel partners have a huge cache of cash generated over the last decade! All these assets can be creatively utilised for leveraging the growth,and the industry overall can be big lever of prosperity ahead.Also many MNCs have a natural advantage today,as the INR is weakening against major currencies and is expected to decline till at least two to three quarters.These companies can help their own cause if they help the Indian market by announcing FDI allocation for the same products which they sold over last decade.Their companys local sales forecasters can help them with this pipeline visibility!

Turning the attention to buy side of the equation our Procurement of T&M needs to undergo paradigm change.Smart professionals need to take over from sarkari babus and officers mentality.They have to strike strategic advantage to their organisations (saving foreign exchange,operational knowledge sharing ,deferred payments on capex/opex conversion etc).They have to move from L1 syndrome totally and help organisations improve on the larger efficiencies and efficacy of procurement.T&M companies can sure take advantage of their product line and customers opportunities in this fiscal.

T&M Industry in India:Scale,Integration and Market Leadership needed!

For last several blogs we had been discussing how we can utilise the challenging time today to put several actions in our different activities so that the pace of T&M industry in India does not get broken and we can take a smoother ride.

The tough times really need tough measures and we need to enter an area where the T&M industry finds itself beyond its comfort zone,and where it has never invested sufficient resources of labor and knowledge workers. I recall the development of ADA software platform of Eighties in the US where a similar impasse was to occur in the hardware/software integration in Government programs.The industry responded by stretching allocations beyond normal that time.The programs itself were not successful as far as the original intent was meant,but the industry was inspired to run several multiple alliances and JVs in sevesal fields contiguous to the field!

I think seeing the last several generations of T&M professionals in the Country and the Regions in Asiapac, we feel some sort of test of time is going on here.Management of alliances is taking energy toll and integration of disparate cultures of business, geneti codes and geographies is the issue to focus.It is getting even more complex,when these T&M companies try to emulate the 'number of feet on the street ' success seen at big IT companies majors : like Cisco, IBM, Nokia etc.Cohesion and well integrated team does not happen in isolation, by a white knight approach or even parachuting some leaders from somewhere into the Company concerned.

For the T&M companies,managing partnerships becomes very crucial and critical.Good Pragmatic leaders have to tread a very fine line.They have to have a "trust but verify" approach and be ready for changing mid course. Managers must be prepared for "When the facts change- I change situation on the fly.Actually Management of partner ecosystem is a sort of General Management(with sales bias ) of course, where flexibility,integration of disparate interest group,flexibility and platitudes are all on the test of fire.We need in the T&M companies today these scaling,entrepreneurial and instinctive Leaderships this Fiscal.

T&M Industry in India : FY14 must see Defense oriented FDI now!

GDP Growth slowing, Fiscal Deficit, Trade account issues can all be taken very well by the one Mega sector of the Indian Economy.This sector is Defense. Sector budget currently is around 200,000Cr  and really becomes important where trade deficit because of import sensitivity is very crucial.This is a sector which is also purely expenditure driven with indirect benefits happening to the other sectors if local manufacturing can be triggered by the Global FDI.India needs newer technology in this strategic sector,and the limit of 26% is a big drag on it for Global players to come in.


Most of the leading Consulting Companies and Investment Banks are readying their Pitch Books to present all possible Indian and International investors for really leveraging this through FDI driven local manufacturing and technology assimilation.Because of larger macro picture,there is possibility that this time in FY14 we will see the cap moving to 49% if not higher.The implications to our manufacturing jobs,the sector and the GDP can be tremendous if long term foreign investment moves to India.Cascading effect to the T&M equipment sales and growth will be very significant.Since we are contemplating large capex and followon offsetting, software,services and support T&M equipment to boot.

Since the triggers of all these are current account deficit,import sensitive purchase and defense purchase policy related processes, the impact on jobs can be also positive for local industry.It is one sector where the immediate gains can be had as for the next five to ten years the Defense Requirement is expected to grow and the geo-political requirement expects India not to let up.I think after a gap of almost 40 years we should see big ticket purchases happening here for Electronic and so the derivative T&M equipment as well.

T&M Industry in India : Will FY 14 see the Basics of Network Management and measurement?

TESTING TOOLS,  ACCESS  , AUTOMATION ,NETWORK MEASUREMENTS  & NETWORK
MANAGEMENT  are competitors or partners?


We are seeing increasing clamour of new technology becoming a new source of competition and corporate rivalry as more and more networks are being rolled out.The typical situation in India is that we have been seeing a drop in growth of new subscribers and the revenue from the Voice services we are simultaneously seeing a fillip in rollout of advanced technologies too. So, the Quality,Productivity and Profitability of both the new and old networks is under scanner.The T&M once again has to respond to this challenge.The decision is not going to be taken by the CTO or even the CFO in isolation but Business has to drive the T&M procurement challenge !

Deployment phase generally involves the installation related long-term analysis of pre-defined test procedures and sequence stored on the test templates.Portables need to be deployed for most of the measurements.Ease of use and robustness become the key here.During the maintenance phase the same thing is turned to baseline or out of the baseline measurements are needed,Tributaries are monitored and full glance remote control and unambiguous quality assesment done by the Automation based systems.This actually becomes more of Management than just Measurement described earlier.

Areas in common between management and measurements are found in the field of monitoring systems and statistical analysis & prediction.And actually the impact of these on opex determines our view on what and how much of both will be invested in.We may have either of these operating philosophy-either use a method outside the system or integrate the testing in to the system.Separate measurements are needed to detect the faults in the manufacturers products,but the inbuilt test systems are more powerful and less expensive.However the flexibility is more in out of system Portables type of T&M.

Todays scenario in India requires us to go back to these basics when 4G technology is at the threshold of deployment, new networks are getting into the mainstream of tornado,and yet the opex and capex need to be managed in such a way we dont make T&M becoming drag on the Business !

T&M Industry in India : FY14 can be the year of Interface/Interoperability Testing ?

IDEA  OF ENSURING AUTHENTIC  INTERFACE / INTEROPERABILITY  TESTING

The Big Picture objectives of  our T&M Industry is primarily  to help create the Ecosystems where the QUALTY , PRODUCTIVITY', CONFORMANCE  and PERFORMANCE  aspects of the User industry can be improved and assured. Such an entity or an organisation has to be created in India either through Regulatory Framework in different sectors or can be developed to augment so that an existing setup can go up to highest level of Credibility and Reference. Since T&M industry serves many sectors of our Economy it is important we prioritise, and focus on those sectors with immediate and high impact on Society and Consumer protection. In this blog posting I will Cover Telecom related needs of such an organisation.

Most of the T&M techniques and Quality in Data and Voice Networks is done through test and measurement of Electronics Equipment.The Test & Management of the Networks Interfaces and Interoperability is realised by the Collaborative efforts of Industry , Test Labs and Staff , Global Standards Organisation and National Governments adhering to agreed norms for that sector.While we have these organisations in some fragmented form,and bits and pieces in Telecom we  the Integrated approach hasnt been tried successfully.

In this blog we will bring out the key objectives of such an organisation,so that it is Vendor Neutral,Technology Current, on par with Indian and Global Standards of Performance & Conformance ,Academia  and Regulator. Industry Users, the Standards Body and other stakeholders
will be part of this organisation. Organisationally it had to be autonomous in its working and can be a Society on the lines of CDoT  or some variant. It will have its own Board to manage and direct its activities and draw people from Technology Industry, Administrative background and Legal and Corporate  Law expertise.

Such an organisation will have other components to it,and we will discuss these in some subsequent blogs.However one thing is clear that such an organisation is overdue and FY14 could be and should be the year of its Logical Founding & implementation.


 

T&M Industry in India : Ideating for FY 14

So, the new financial year FY14 is here. We continue to watch major sectors intently.Some good news in Telecom ( Cooperation between major Corporates announced !) started the new year.As well as the Prime Minister taking a very motivating instance in front of India Inc. While  I am happy for the renewed optimism ,both our real Economy and Capital Economy doesnt give lot of inspiring indication.Globally the US Economy is getting stabilised with 2% solid growth.This growth may trigger hope to our own tech sector on the services side!

There is always a big risk when one tries to think some curative ideas for newer growth possibilities.But let me be the bad boy and suggest the T&M sector a fresh approach to generate sales through what I call -Enterprise Test Integration, ETI - approach.This is proposed for both Manufacturing and Deployment Projects but more for Manufacturing standpoint.Manufacturing in Electronics and Telecom really is somewhere in between R&D and Field Service segments of T&M.This is not penetrated on a Systemic Basis. By that what I mean is the Sales guy is still boxed in the mentality of selling boxes to individual users,but not thinking of the total factory as the T&M buyer -the Boxes plus the Softwares, Services and Test Management - for the total enterprise.The T&M sales guy along with the other solution architects needs to adopt "Total Manufacturing Test Solution" as the pitch rather than the Boxes to drive maximum Enterprise Share rather than selling
Boxes alone.

I firmly believe that T&M in India is exposing itself to various gaps in selling approach as these professionals are highly stuck up with portable boxes.They havent groomed themselves to what are the Business Issues of a Manufacturer? How a T&M sales guy can bring in newer skills from his support stable ( IT integration, third party hardware and software and other vendors in rhythm) to offer superior ETI package for them. This will automatically wrap bigger revenues for T&M industry and reduce pains for the customer. Let us hope we see some success in FY14 for ETI based selling.
I will be very keen to assist finding their first such customer ! 

T&M Industry in India : A precursor to FY14.....

As we discussed in the previous few blog postings ,the T&M industry revenues in the year winding down today have seen tepid growth. Overall the revenues growth was tepid with few bright spots and the odd big deals closing on the Mega Defence and Telecom Sectors. The Defence particularly the Army and Naval units were able to procure large no. of handheld and portable instruments,even though there was this cutback on huge budget of approx 193 K Cr. Likewise some deals on the 4G deployment were squeezed into this FY . Some of these deals came really by the skin of the teeth and had a long suspense of uncertainty!

Now what could be the prospects and outlook for the FY 14  ahead of us,just the week starting Monday? We have also to remember the crucial nature of this decade we anticipated right in the beginning of  FY11. And the churning is happening as we write this post.Many small acquisitions are being done by top 4 companies Globally and more is expected. I reckon that more than the M&A activity what is likely to happen change of architectures,standards evolution and fusion of Digital Techniques and FPGA in a wider range of frequency instruments. This off course will lead to smaller blade size in the modulars, new formats of ATEs and progressive use of USB and super-USB in portables.

We will see yet another change in the market place and channel realignment. And this will be through productivity increase with numbers of feet on the street and technology both.Now that has lot of consequences for manpower development and deployment. Propelling online sales will happen because we in general are facing lot of logistics issues on global delivery and connectivity. E-Commerce will be catching on in our very protected ( rather insular market of T&M) space. I expect at least 1-2 international chains sprucing up the chain to handle portable deliveries this way.More than probable will be one of them will be an European chain. Watch this space for FY 14 . Bye for now FY13.    

T&M Industry in India : What can be learned as we move ahead?

The T&M industry in India is very forward looking,as the way they have taken to new approaches in the organisation design, development of processes and commercial systems and adoption of Global Best practices it is safe to assume it is much to look ahead. The main issue seems to be reaching a revenue base which is critical for taking off,as most of  the T&M boxes businesses are highly concentrated in few cities, few customers and few end use sectors as such. The reason why it is so concentrated is perhaps because the two sectors which could have gone long way  - Education and Manufacturing  could not.

Be it that may, Here we are ! We need to see what can we learn with the Global trend in T&M technologies and development of new architectures and platforms besides making sure that the portables type of T&M products also  are with the modern trend elsewhere.On portables first,there is clear emphasis  on developing  MINIMALIST  features which have sufficient attributes but stripped of loaded Costs and prices. We do find lot of very low cost products developed for the Field Service applications eg  Low Cost Signal Generators and Spectrum Analysers in the Global market. Another interesting feature is the hooking to the keyboard with the USB or even Super-USB connectors.Also there is abundant miniaturisation by nano-technology or newer lithographic  techniques to reduce platform size.

New architectures are also emerging which is driven by standardisation to PXI modules.This helps many times the ATE design more compact and suits test OEMs immensely. Along with the switches and other accessories the ATE becomes more compact and economical.I think the T&M architecture in immediate future is heading in PXI way going by the Dollar figures accrued to this format year over year.

I think both these major trends internationally will support the needs of the Indian market. Our markets in emerging fields of Aerospace / Defense and also the other field service markets of Commercial communication and broadcasting require these type of formats extensively.Let us see if the local industry tunes into these forms and architectures to develop volumes here!

T&M Industry in India : Can Cloud Testing & Mobile Data be our growth trigger?

The T&M industry is  providing enough signals how a tech intensive business can stagnate and we are not finding a growth mechanism? The industry is supposed to be laced with all the complex modern techniques and processes,but for its own growth it remains hamstrung with its user Industries , like Defense and Telecom, Semiconductors etc . If these industries stagnate we in T&M stagnate too. So, what can we do under the circumstances. Perhaps the newer technologies of Big Data , Analytics and Mobile Apps can be the answers!

We can try and use our Marketing campaigns through Mobile Data Apps as we know the populations of Smartphones as percentage of  Total is increasing day by day.This is also encouraged by the large 15-35 yrs population who are increasingly accessing net on their Smartphones.If we use the power of this mobile data and reach users of T&M equipment ( known thru Analytics and other resources,and other Unknown too) we can create lot of qualified and hot leads of the users intending to buy T&M equipment!

The industry figures estimate India to have 360-370 million users of internet in 2015.The penetration of internet and Smartphones in our society needs to be leveraged for growing the T&M Pie in the Country.At a larger level we can even aim for T&M $ per capita of Indian population at large! I am sure this will interest every well wisher of T&M industry everywhere particularly in India.
 

T&M Industry in India : Some feeble signs Mega activity

As usual the T&M Industry in India is highly erratic being still driven by large scale Government Policy frame work and how Global money will travel in sunrise investments here.Yet the signs are "positive" notwithstanding gloom because of Current Account Deficit,Inflation and not much growth on the investment pick up. But we need to understand the dynamics of growth from the policy point of view as well.Growth on overall basis is dependent on our Labour and Capital Productivity and right now the inflow of Capital investment and its Productivity needs stimulation.So, the Government needs to incentivise the potential investors ( Domestic and Foreigners) to invest in sectors which have large consumption story as well as possibilities of Value Addition and thus provide boost to its exports too.

We are therefore a little fortunate to see the large Business Houses are getting interested in two main markets (hitherto untouched by them : Defense & Security and now Semiconductors Fab).It appears that the programs of couple of Big Corporates are seriously rolling out.This augurs well because these sectors within the gambit of Electronics are not only going to be Capital intensive,but specifically big booster to T&M systems spending and investment.At least the process is seen to begin and this time around we can see " This time is going to be different" syndrome.If right choice of Vendor and incentives are there,we hope to see some big ticket sector opening for private participation. Let us all hope India triggers a new front opening and we are able to attract investment and IP both.More than any other segment, T&M Industry in India stands to get a Booster!

T&M Industry in India : Are green shoots started appearing?

Finance Minister presented a "please-all" very bland budget. He tried to simulate the investment in the Economy by announcing innovative index-linked saving bonds too.He made a point that importing Gold through the drainage of Foreign Exchange is not only not in the interest of nation but the individuals as well.But it may sound only preachy to the common man,as there are no opportunity to save and protect the Funds, except buying speculative bullion,or the real estate in the cities! The current account deficit and inflation all around ( CookingGas,Fuel,Power and Water) is eroding the financial savings and so investment elsewhere!

Some external investor institutions are trying to see optimism in this budget.For one thing they see the FM with good track record in liberalisation,and Expenditure cutter. So they feel India has potential to grow and projects will take off. Well in the Defense sector there is cut on the expenditure and in the Telecom,particularly in the 4G area there are a ripple of deals getting signed.Looks like the LTE deployment is going to happen and we definitely see the few mega T&M businesses getting done before Mar 31 ! Will it lead to a positive turnaround? Jury is still out.

 

T&M Industry in India : Visioning a new Architecture(2)

It is good to be back with our thoughts on the art and Science of visioning new architecture for the T&M industry and its markets.One of the thing being thought up is by replacing all the existing boxes and applications by PXI based modules.This itself is quite a big breakthru in a country which has very old legacy of portable installed bases.PXI internationally has been accepted in last decade or so very well and holds out promise for newer Product/Applications.The physical frame and the connectors etc are also standardised.In fact , going by todays stat the VXI seems to be yielding the space to PXI. The application layer is also expanding and standard datasheeted products are regularly hitting the market. But can it be, Should it be the prima facie architecture of choice,in India, for a lrge unwieldy and Government dominated installed base of India?

Another associated question is Should there be a new architecture ,or ANY architecture at all? Why not first try to look from the " Need behind the Need " angle? By this phrase I mean Why the instrument is needed and need to measure the parameters -like some conformance to the testing standard,or some other regulatory imposition on the applications? If we isolate all the "soft" and "hard" part from the boxes we can get the basis of practically virtualising the T&M box instrument and automating the test process,if needed externally.

What else can be the alternative architecture? Can the newer standards getting announced be applied to Indian conditions? Or should we think of absolutely brand new approach? We will discover more in our future posts,because this is critical from the growth of the market here.Watch this space! 

 

T&M Industry in India : Visioning new Architecture!

At this time of the year many of us active in the T&M industry Globally are back from the Holidays and for others it is biginning of the Financial year as well. I thought it will be in order to do just some imagineering and kite-flying on our industry.

Well our industry is fantastic no doubt, yet it will not hurt if we encounter few innovations in place both in terms of selling and supporting to newer users and applications but also defining new platformsand architecures.And these innovations need to be relevant to Indian conditions and the needs of the user Industry here,which is being served by our Professionals. Towards that I seek our being able to reach out Global Standards of Modulars,a new methodology of common platform of testing across frequencies and may be a new indigeneously developed integration of hardware and software/services.

We in India are somehow stuck in old portable mentality and all technology based new announcements are going waste.We are just commoditising more and more and in the bargain we are losing price-realisation and not moving up the value chain of technology/integration or applications.In any industry with time,the Services oriented Architecture drives the total revenues.And the paradigm thinks bigger and bigger envelope of Hardware plus Services.So,in that respect we need to think beyond the box,and outside the box simultaneously.

For an immediate thought I propose we start replacing and substituting portable instruments by modular instruments (may be PXI architecture) to leverage maximum work being done Globally.This will have twin advantage of using standardised modular instrument and also encourage us to think "systemic" by using packaged software and other data sheeted services from T&M companies.The functionality of test will improve and ultimately the user will gain in terms of Quality,Productivity and Profitability. The possibility for T&M will be incremental business for hardware and services finely tuned for the user.

I will discuss these thoughts and road maps in future Blog Posts. Trust you are off to a good start in 2013 ! 

T&M Industry in India :Economic Linkges with Macros !

As the new year takes off,and we are past one fortnight some indications of the Government mood looks to be distinctly changing for the better.There is little bit economic pragmatism shown and the major part related to T&M industry is the signals of halving the CDMA spectrum price for next round of option.Supreme Court also lets the licenses continue till the March First week,enabling prominent players in CDMA taking part in the option. I think Government is finally realising the market call on selling Spectrum.It augurs well for Capex once these players are motivated to deploy network.

Likewise,there seems to be lot of customer churn and infact decline in number of subscribers and count among top ranked operators and only small hinterland based operators are gaining traction due to both focus and lower base effects.This is really giving a fillip to OSS/BSS activity and keeping tight grip on the Quality Management of Network.Its outfall can be positive to the T&M industry uptake. The sale of Smartphones catering to lower value segments is being upped by proper promotions as well. T&M may see some growth in maintaining wide customers devices there.

There is a little bit of talk on cutting back by 10% the Defense Budget of Rs 193000 Cr to address the current account deficit staring the Government finances ( Subsidy on Food,Fuel,Fertilisers).But its effect on ultimate T&M purchases will not be significant due to little size in comparison to overall pie.I think large scale deals of T&M through the DGS&D and otherwise direct from the users labs and field organisations should come through in this JFM period.As far as the smaller T&M players below the Top deck are concerned,they seem to be on good growth traction this year.So,overall the FY13 should exit with a small but sort of positive growth tone.We are expected to hold up to the overall revenue. More to come.

Happy new year. 2013 definitely hold HOPE and positivism ahead!