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.