Silicon Graphics Takes Advantage Of Indian ISP Boom
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The Indian subsidiary of the $3.1-billion Silicon Graphics Inc (SGI) has all intentions to take advantage of its international head-start in India.
SGI is on an Internet offensive in India and highly optimistic for the server business of its Rs 81-crore (about US$20 million) Indian subsidiary.
Globally, the company only moved into the ISP-related business 18 months ago, but it has already developed a $200-million market share and partnered with some top ISP's like AOL, WorldAccess and AT&T.
Though telecom costs are one of the highest in India, ISPs will need strong efficient servers to stay in business, and the company thinks that it can meet the demand.
The expansion plans are backed by a savvy business strategy. In addition to offering double-user connectivity vis-a-vis any competitor, the company guarantees that its servers operate uninterrupted and maintain performance.
With a population close to one billion, the numbers for India's potential ISP market are mind boggling when compared to the 7,000 ISPs in the United States that serve a population of 270 million people.
Even if one assumes a fraction of the existing 600,000 Indian cable operators become ISPs, the business prospects are extremely bright.
"Keeping a three-year view, we can make some kind of similar estimate (like the US) for the Indian market," said SGI's country head Ashok Desai, predicting the business potential. "But how that pans out is not easy to quantify at present."
In 1997, there were 250,000 Internet users in India, and it has since grown to a million.
"We can safely assume 100 ISPs," he added. But the service providing industry is just one of the business areas that the company is looking at.
SGI is a world leader in visual computing and high performance systems. It plans to consolidate its position in these areas as well.
The California-based company has outlined two business areas that it plans to actively expand in India: communications (which would include ISP's, Internet and intranet-related applications) and datamining.
To actualize its ambitious plans, the firm is working overtime to boost its operational infrastructure in the country.
Revamping the sales and marketing network is the first thing on the agenda.
SGI may even consider setting up an offshore R&D center in India, the first of its kind outside the United States.
SGI is also weighing the possibility of making India one of its manufacturing centers for its operating systems.
The reasons are not difficult to find: availability of qualified professionals, high English literacy levels, low cost and a more open business environment.