A Step In The Right Direction

For a city which accounts for almost 70% of the state's IT business,
Bhubaneswar has just four to five partners who do business above Rs 5 crore and
another seven partners who do business with the turnover of over Rs 3-4 crore.
There would be another 10 partners whose business registers revenues upward of
Rs 50 lakh. IT Association of Orissa (ITAO) officials say that the monthly
sales in the city will be in the range of 750 PCs.

Earlier customers from Balasore, Behrampur, Cuttack and Rourkela would rely
on Bhubaneswar for their IT purchases, which resulted in high turnover. But with
the proliferation of IT business in these cities, business in Bhubaneswar has
taken a slight hit.

The biggest drawback that partners in Bhubaneswar have to deal with is the
lack of corporate houses in the city and state. Also, the purchase decisions for
the few corporate companies present are taken from their head offices in metros.
"We get very little business from corporates and have to concentrate either
on the SMB or SOHO segments for sales," said Sanjeev Nayak of Oricom
Systems.

One more growing customer segment is that of first-time users. With falling
PC prices, more households and small business owners are lining up to buy
systems. The 36-odd engineering colleges in the state are big IT spenders.
Especially as each have around 100 PCs deployed on the campus, which need
constant upgradation and servicing.

Another obstacle in the channel business is the lack of being organised among
partners. Orissa has around 150 registered partners and approximately 50
small-time players. The latter do business at a margin of 1% and spoil the
market for their peers. "We have tried to get them into the fold of ITAO,
but they are not willing," said Manoj Lalani of Lalani Computech.

Partners are happy with the pro-IT stance adopted by the state government,
which is soliciting more investment in the region. The government plans to have
direct flights to and fro, from the city to Bangalore as an added incentive for
software companies to set up their base in the city.

A Silicon Valley has been set up on the outskirts of the city, where Infosys
has already set up its facility. Wipro and Tata Consultancy Services are rumored
to follow suit. Currently the city is competing with Kolkata to get more
corporates to set their base here.