Dissertation Report 2009-2011

44

MARKETING STRATEGIES ADOPTED BY HCL

INFOSYSTEMS LTD. IN RESPECT TO

ITS COMPETITORS

DISSERTATION REPORT

2011

Submitted for the partial ful f i l lment of the requirement for the

Award of

MASTER IN BUSINESS ADMINISTRATION

SUBMITTED BY:

MAUSAM RAJKHOWA

UNDER THE SUPERVISION OF:

ASHAR UDDIN

Faculty (Marketing)

INSTITUTE OF MANAGEMENT STUDIES, ROORKEE

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CERTIFICATE

This is to certify that Mausam Rajkhowa of INSTITUTE OF MANAGEMENT STUDIES, ROORKEE affiliated to AICTE has completed his Dissertation on “MARKETING STRATEGIES ADOPTED BY HCL INFOSYSTEMS LTD. IN RESPECT TO ITS COMPETITORS” under my supervision and he made his project to my entire satisfaction and as per requirement of the M.B.A. course.

_________________________

(Signature of Project Guide)ASHAR UDDINFaculty (Marketing)

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ACKNOWLEDGEMENT

The authorship of a monograph is usually attributed to one person but a report on the

Dissertation like this one is a joint affair I would like to take this opportunity to thank

from inside of my heart to all those people who have directly or indirectly helped me in

this Dissertation.

I would f i rs t l ike to extend my s incere thanks to ASHAR UDDIN Sir ,

my guide for g iv ing me his exper t guidance and encouragement a t

var ious s tages of my Disser ta t ion .

Las t ly ; I would l ike to thank My Fr iends for providing me var ious

v iews and guidance throughout th is projec t , which cer ta in ly have

he lped me to evolve as a more matured individual wi th a more rea l i s t ic

perspect ive towards l i fe .

On a specia l note , I would l ike to thanks a l l the facul ty s taf f members

of the Ins t i tu te of Management Studies , Roorkee for a l l the i r suppor t

extended to the s tudents a t a l l point of t ime and to my parents and

f r iends for the i r mot iva t ion and inspi ra t ion .

MAUSAM RAJKHOWA

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PREFACE

Today’s market scenario is totally different from few years ago. Consumer has a lot of choice for

every product because day-by-day new companies are coming with their product. Later there was

limited choice for mostly products and companies didn’t have to put much efforts to sale their product.

But today’s scenario is totally different. Consumers have choice because of availability of varieties and

options. We can say today’s consumer is the king of market. So it is important to know his buying

behavior and try to fulfill his demand. Company’s aim should be customer delight not costumer

satisfaction.

The purpose of this dissertation project is to know the marketing strategies which HCL Info

systems Ltd. uses to become the market leader in the field of Personal Computers and Different

marketing strategies adopted by HCL to compete with others.

This dissertation report making was really good learning period for me. I got opportunity to

know the theoretical knowledge related to marketing strategies.

This dissertation report is part of course of M.B.A. program, which is set by AICTE, and it is

necessary for every student to undergo for dissertation project. This project report is also made for

submission to Institute of Management Studies, ROORKEE. Sustains including in this report are

research methodology, analysis of activities, conclusion and bearing from this project Bibliography is

also given in last to know from where information has been taken to complete this project. I hope this

project will serve the purpose.

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CONTENTS

Chapter1: INTRODUCTION 1.1 IT- HARDWARE industry1.2 India a Global IT super power1.3 Evolution of IT industry

Chapter 2: OBJECTIVE 2.1 Objective of the research Chapter 3: ANALYSIS 3.1 HCL: An Introduction 3.2 HCL: Marketing Strategies 3.3 Competitors

Chapter 4: DATA ANALYSIS AND ITS INTERPRETATION4.1 The Competition 4.2 Impact of the HP- Compaq merger4.3 Customer’s the King

Chapter 5: CONCLUSIONS

Chapter 6: SUGGESTION

Chapter 7: BIBLIOGRAPHY AND APPENDICES

Chapter 8: CHECKLISTS

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CHAPTER 1

INTRODUCTION

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1.1 IT HARDWARE INDUSTRY: AN NTRODUCTION

The Indian IT industry is, undoubtedly, a shining jewel in the country’s crown. The

achievements of our IT companies have earned us the respect of the most developed nations of the

world. The skills, ingenuity, dedication and drive of our young IT professionals is acknowledged

worldwide. Today, there will hardly be a company of any stature anywhere in the globe where Indian

IT professionals are not making a stellar contribution. 

However, most of the growth in IT has been in the software services and support segment. I do

believe that if we are going to continue our thrust and growth in the IT industry, it is imperative that

we develop a robust hardware industry and emerge as an important destination for high end product

development.

  While software development has been the more visible face of our IT industry, we cannot

deny the fact that ultimately it is ‘hardware’ that runs the ‘software’. While ‘hardware’ is of no use

without software, the converse is also equally true. 

The development of a vibrant ‘hardware’ industry in India has been lagging behind on account

of various factors. The underlying fact is simple. Unless companies are able to manufacture products

that can compete with the world’s best in quality and unless they manufacture in volumes that make

them cost efficient and globally competitive, they will not survive. 

A major bottleneck in the development of the ‘hardware’ industry has been the lack of a strong

local component industry. It is my humble suggestion that the government, both at national and state

levels do everything in their power to promote such industries so that by the end of this decade, we

can have a strong and world-class component industry.

Sure, we have a long way to go to catch up with Taiwan or China or even Malaysia, but I

believe with the right encouragement we can develop a strong ‘hardware’ industry. 

I must make a point here about the viability of ‘hardware’ as an industry in India. It is a myth

that the ‘hardware’ business is not profitable. This point of view has been largely perpetrated on

account of the large number of players who made half hearted or weak attempts to enter this

business.  

To be a success in the hardware business requires both vision and grit. I often give the example

of my own company D-Link (India) which, starting out as a small manufacturer of modems has

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grown to become a Rs. 2 billion company with a product range that extends from modems to routers.

But success has not come easy. We have made massive investments in both plant and people and

have spared no effort in getting the best of equipment and talent. More importantly, we have set up a

strong R&D backbone to support our manufacturing. Which brings me to the next point: the

importance of R&D? 

Technology in the IT space changes very rapidly. Technological obsolescence is not just a

‘cliché’- it has thrown strong companies out of business. In this scenario, the importance of R&D can

hardly be overemphasized. It is vital that those who venture into ‘hardware’ industry are seized of

this fact. Only through strong R&D can manufacturers ensure continuous product improvements and

keep their offerings truly ‘state-of-the-art’.  

Over a period of time, with a strong R&D base, Indian companies can look forward to

developing innovative products and own Intellectual Property Rights (IPR’s) on such products. 

I dream of the day, and I believe it’s not too far away, when technology for products developed

by Indian companies would be licensed to global manufacturers as well as innovative products

manufactured by Indian companies would be available worldwide. 

The state of our hardware industry and R&D infrastructure is quite the same as that of the

software industry a couple of decades ago. Visionaries like Narayanmurthy and Azim Premji have

shown that we have the potential to achieve global stature in a business. Extending our sights a little

further, we have seen how a Ranbaxy or Dr. Reddy’s have got recognition for Indian R&D in the

Pharma industry. There is no reason, therefore, why we can’t develop a strong R&D base in the IT

industry as well. 

The development of a strong hardware industry base would also go a long way in increasing

the IT penetration in our country, which is still very low. 

I do believe that we have all the elements to become a significant player in both IT hardware as

well as R&D. As IT penetration increases, as organizations across the country network, as we build

more robust IT backbones in various spheres of our activity, we will need more and more hardware.

Rather than be totally dependent on imports, we need to have a thriving component and hardware

industry backed by strong R&D. Along with our strength in software services, it will provide another

cornerstone towards India truly becoming a global IT superpower.

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1.2 INDIA A GLOBAL IT SUPER POWER

The Indian computer hardware industry has growing at a rate of over 30 per cent annually for

the past few years and this pace is expected to be maintained until 2005.

As the first table above shows, domestic manufacture has been increasing, but so also have

imports. The locally manufactured computers cater to low-end applications while the imported

computers continue to facilitate CAD, CAM, CASE, multi-media, and other high-end

applications.

Indian computer hardware and peripherals industry segments are dominated by U.S. joint

ventures and suppliers. IBM in collaboration with Tata’s, Hewlett Packard in association with

HCL Limited, Digital Equipment Corporation with Hinditron Group, Silicon Graphics with

Tata’s, (just to mention four major joint ventures) manufacture computer hardware for the

domestic and export markets. Compaq, Silicon Graphics, and Dell have opened offices to sell

their computers in India. Sun Microsystems and Apple distribute their products through Wipro

Information Technology Limited.

Most business firms in India have not computerized. Many of those who have, still use

outdated products such as dot-matrix printers instead of laser and ink-jet printers.

As more and more international companies set up office in India, the demand for hardware will

increase.

The growing awareness of the case to shed fat in the public sector will call for more automated

operations; this too will generate demand for computers.

The prospects for both exports to, and investment in, this sector are excellent.

IT hardware manufacturing in India is a classic case of the chicken and egg syndrome. Should we

wait for the market to grow to high volumes that justify creating a manufacturing base in India, or

should we just kick-start manufacturing so that prices then come down and thereby create volumes?

The debate has raged on long enough and no consensus seems to be emerging. Rather, things took a

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turn for the worse with recent years witnessing a perceptible decline in manufacturing activity.

Therefore, when a recent MAIT study, conducted jointly with Big Five firm Ernst & Young,

concluded that the Indian hardware industry had the potential to reach a size of $62 billion by 2010,

it not only raised many an eyebrow, but derisive laughter from skeptics.

Sample some salient conclusions of the study which paint a rosy future for India Hardware Inc: By

2010, the Indian hardware industry has the potential to grow to twelve times its existing market size,

with the domestic market accounting for $37 billion and exports accounting for another $37 billion. The

study has identified major export opportunities in the areas of innovative new devices, contract

manufacturing and design services. The study says that component exports offers an opportunity worth

$5 billion, while that of design and related services in embedded systems and wireless

telecommunication services can bring in another $7 billion by 2010. Further, ambitious projections have

been made in the area of contract manufacturing, which represents a $11 billion opportunity if India

succeeds in capturing a share of only 2.2 percent of the global pie by 2010.

Though the rosy projections look good on paper, is this growth really possible? Sceptics deride the study

as an attempt by the hardware industry to copy its software counterpart, which has been tom-tomming

Nasscom and McKinsey’s projection of $87 billion in software revenues by 2008. MAIT officials are

however quite upbeat. Says Vinay Deshpande, president of MAIT, “There are four key steps which we

need to take to make India a manufacturing-friendly country. Firstly, market India as a hardware

destination and build a brand akin to software. Making India manufacturing-friendly through

improvements in infrastructure and logistics should follow this.

We should also emphasize on design and innovation through the development of Indian solutions for

Indian needs. All these initiatives need to be backed up by the government with adequate funds.”

The bright side

For a country whose economy is so heavily dependent on agriculture, a vibrant hardware industry has

the potential to generate three million jobs, especially for Indians who come from economically

underprivileged sections, who aren’t very highly educated. So, in the words of Deshpande, the hardware

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industry can be some sort of a panacea for India’s unemployment problem. Also, with the size of the

contract manufacturing industry expected to be over $500 billion by the year 2010, Indian firms could

grab a significant chunk of the pie in a manner pretty similar to India’s emergence as a key player in the

global BPO stakes. And, with a potentially huge market in embedded systems emerging, Indian firms

with the right mix of hardware and software can be big players here. For the record, of all the high-end

processors produced in the world, only 6 percent are used in PCs and the remaining 94 percent are used

in entertainment electronics, non-PC devices, communication products and

embedded electronics. The hardware revolution is also essential for the

continued high growth of the software industry. As Vinnie Mehta, director of

MAIT, puts it: “India can lose out on the software advantage it has already built

up, and the future potential,

if it does not concentrate on the hardware front. For example, the estimated domestic hardware

requirement by 2008 to meet the software target of $87 billion is $160 million.”

And now the problems

But before India Inc. can go into ballistic mode on the hardware front, there are lots of serious issues

that need to be addressed. Issues like lack of local availability of input raw material, ever changing

government policies, inconsistent sales tax structures in different states, high interest rates, customs

duties on capital goods, poor infrastructure, inordinately long and variable transit times all add to

uncertainty, delays and increased costs. Something that hardware manufacturers dread. Explains Manoj

Churra, country manager-manufacturing, IBM India, “Everyone in India cribs about duty, but even

China has a similar duty structure. The main reason why companies prefer to locate their manufacturing

operations in China is because customs processing in China is much faster.” Here, even after a

manufacturer’s raw material arrives at a port it might take another month or so before the goods reach

his factory. In the fast changing world of technology, that’s virtually suicidal for companies into

hardware manufacturing. Besides, labour laws in China are also very flexible.

In India, laments Raj Saraf, chairman and managing director of Zenith Computers, there are a lot of

restrictions for the hardware industry. “The software industry has grown in leaps and bounds simply

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because there have been no restrictions. On the other hand, even if I do manufacture in an SEZ in India,

I cannot sell my products in the domestic market.

The government says everything should be exported. But it should realize that the industry will always

flock to an area where there are least restrictions.” The government can also take a cue from the fact that

if the industry is allowed to grow to three times the size it currently is today, it can earn more tax from

its revenues.

The manufacturing industry in India also suffers from a lack of proper environmental standards. With

environmental concerns mainly ignored or casually overlooked by Indian corporate, MNCs desist from

setting up manufacturing bases here since there is no compliance with ISO 14000 standards, which deal

with environmental issues.

On the design front too, there are lots of opportunities left to be explored. Design exports are a $7 billion

opportunity in areas like embedded systems and wireless telecommunications. While Indian firms do

some work on hardware design exports, many unfortunately show this as software exports to avoid tax.

Fact is, some experts say a robust design sector could play a huge role in bringing down PC prices too a

significant reason why PC penetration remains low in India. For example, on a CPU that costs $150, the

material cost is not even $4. Adds Deshpande,“If we can get a design, like say a PII, made either by

ourselves or if we can get the government to buy out a design and start manufacturing here, this would

bring costs down substantially in PCs.”

The silver lining

The Indian hardware industry could learn a thing or two from the Taiwanese hardware industry, where

companies started off as component assemblers some years ago. Today, the same firms are world

leaders, and in fact outsource their manufacturing designs to other countries. A majority of Taiwanese

firms are now original manufacturers of chipsets.

Another instance that could inspire companies to set up local manufacturing bases is the example of D-

Link. D-Link is one of the very few hardware companies in India that does local manufacturing.

Recently, the company tied up with Taiwan-based Gigabyte Technology to manufacture and market

motherboards locally. D-Link will manufacture approximately 30,000 motherboards per month. Besides

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giving D-link a key advantage in terms of technology, it also means utilization of D-Link’s

manufacturing facilities. The cost savings per motherboard when manufactured here works out to be

approximately $5. Hence, if volumes are huge, it does makes sense to outsource contract manufacturing

to India.

And for sceptics who doubt the quality of Indian products, Ram Agarwal, managing director, Wipro

ePeripherals has a ready answer, “Doubting Thomas’s who keep on questioning the quality of Indian

products should know that Legend computers, the largest maker of PCs in China, buys network interface

cards from India.”

Going forward, if the government and the hardware industry proactively decide to work together and

solve issues rather than have one hand clamouring for duty concessions, and the other avoiding issues,

the Indian hardware industry could definitely go the software way-as MAIT and Ernst & Young have

said. The only question to ask is whether the government and the industry are up to it.

Around the world, enterprise IT spend has been on the decline. The economic downturn coupled with

inconsiderate or unplanned spending on IT in the last decade, has contributed to all this.

So what is the scenario in India? As per last year's survey (IS 2002—June issue of Network Magazine),

CIOs had committed to spend an average of Rs 554 Lakh on IT-related investments. This spending was

more or less equal to what they had spent in the previous year (2001-2002).

So, did Indian enterprises spend that amount? As per this year's survey, the average amount spent on IT

was only Rs 468 Lakh. This implies there has indeed been a decline in IT spending. CIOs did not fully

utilize the amount they had budgeted for IT related projects.

The largest spenders in 2002-03 were BFSI, Telecom/ IT/ITES, and Govt./PSU. The average amounts

spent were Rs 1109 Lakhs, Rs. 954 Lakh, and Rs 649 Lakh respectively. All other industry verticals

show modest spends.

Technology is a key component for BFSI and Telecom/IT/ITES verticals. This explains why spending

on IT is high in these sectors. Also, nationalized banks have been spending substantial amounts on

computerization. PSUs have traditionally been big spenders, given the need to link distant locations.

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And with various state governments and quasi-government institutions pushing initiatives like e-

governance, technology has been of high-priority here too.

1.3 EVOLUTION OF THE IT INDUSTRY

On the rise again

The IT spend in 2003-04 is on the rise again, albeit slowly. This year companies plan to spend on an

average Rs 493 Lakh, indicating a 5 percent increase in IT spending. The major spenders are again the

BFSI, Telecom/ IT/ITES, and Govt./ PSU verticals.

The BFSI vertical is registering significant spends; their average budget has climbed from Rs 1109 Lakh

in 2003-04, to Rs 1310 Lakh in 2004-05.

In Telecom/IT/ITES and Govt./PSU, both major spenders last year, the allotted budget is same when

compared with last year. In almost all other verticals, companies are registering a small increase in the

budget allotted for IT.

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In terms of turnover, IT spending in medium-sized companies is expected to grow by 20 percent, while

in large organizations the IT budget may actually shrink by 11 percent.

What technology?

This brings us to our next question: Which technologies are companies investing in? The top areas of IT

spend, in terms of technologies, are: Bandwidth/connectivity (57 percent plan to invest), Enterprise

hardware (55 percent), Storage (46 percent), and Security (46 percent). Both Storage and Security are

clearly gaining prominence in the BFSI sector where information security and availability is critical.

The Indian IT and Electronics market in 2003-04 was worth US$ 20.63 billion of which US$

12.7 billion consisted of software. Electronics and IT hardware production stood at US$ 7.93 billion.

Some 3,500 units are engaged in electronics production manufacturing goods as diverse as TV tubes,

test and measuring instruments, medical electronics equipment, analytical and special application

instruments, process control equipment, power electronics equipment, office equipment, components

etc. Market researcher IDC estimates that the market-value estimate over next 3 years for hardware

products is Rs.75,000 crores.

The Indian electronics and hardware industry has been lagging behind the impressive

performance of the software sector. Most of the hardware requirements of the burgeoning software and

telecom sectors are met by imports which are about 25%.

The Ministry of Information Technology, Govt. of India has estimated that the total requirement

of hardware and components by 2008 would be in range of US$ 160 billion and the investment required

in the manufacturing facilities would be US$ 16 billion. NASSCOM, the leading IT industry body

estimates that to achieve a software export target of US$ 87 billion in 2008, the hardware requirement

would be US$ 50 billion. By far the most comprehensive study was carried out by Ernst & Young in

association with MAIT, the hardware industry body in 2002.

It estimates that given the right incentives, India's electronic hardware industry has the potential

to reach US$ 62 billion by 2010, twelve times its existing size with the domestic market accounting for

US$ 37 billion and exports of US$ 25 billion. The major export opportunities would be in the area of

innovative new products, contract manufacturing and design services. This shows that there are large

opportunities for Indian companies to increase their strength and grave these opportunities for future

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growth. HCL Infosystems Ltd is one of those companies which are working to increase their network

and making innovative new products.

HCL Infosystems Ltd. is currently engaged in selling manufactured hardware (like PCs, servers,

monitors and peripherals) and traded hardware (like notebooks, peripherals) to institutional clients as

well as retail channel partners. Besides, it offers hardware support services to existing clients through

annual maintenance contracts, net work consulting and facilities management.

In 2003-04, HCL’s total hardware turnover was Rs. 12.97 billion, higher by around 24% over the

corresponding figure for 2002-03. Of this, manufactured hardware constituted 60%, traded hardware

32% and hardware support services 9%. The company’s reported operating margins in 2003-04

(including six months of OA, telecommunication and software businesses) increased to 6.7% from 5.9%

in 2001-02, primarily because of better margins in hardware. While average material costs declined in

2003-04, the company was able to retain a part of the margins in its product realizations. Better margins

in hardware resulted in the return on capital employed (ROCE) from hardware increasing from 11.9% in

2002-03 to 25.6% in 2003-04.

In the domestic home PC organized sector, HCL Infosystems is the market leader. Other players

include Zenith Computers, IBM, Sun Microsystems, Wipro, Hewlett Packard. Assembled personal

computers have a large presence in the domestic home PC market, accounting for a chunk of the total

sales.

The overall market for desktop personal computers registered a 28.2 percent growth during

calendar year 2004 as compared to the previous year. What is significant is that branded PCs continue to

make impressive gains against the gray market. According to IDC, the share of branded PCs grew from

36.2 percent in 2004 to 49.2 percent in 2005, registering an impressive growth rate of 74.3 percent.

Interestingly, the gray market remained flat, registering a growth of 2.2 percent, while the total desktop

PC market registered a growth of 28.2 percent.

According to IDC, the recent re-surfacing of finance-based purchase options had an accelerating

effect on the consumer desktop market, which is already witnessing a consistent drop in end-user prices

for both the branded and unbranded PC segments. Among the vendors, HCL Infosystems emerged as the

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market leader with a share of 13.7 percent. The company registered a 91.4 percent growth during 2004

as compared to the previous year. HP followed HCL with a market share of 11.9 percent. HP too grew at

a blistering pace registering a growth rate of 73.03 percent. IBM is in the third place with a market share

of 6.2 percent.

IDC is not the only research firm confirming the signs of robust growth. Gartner, in a recent

report, states that the Indian desktop market grew by 31.5 percent in 2005. Says Vinod Nair, Analyst,

Computing Systems, Gartner India, “Peaking business confidence based on strong economic growth

catalyzed PC purchases in both consumer and corporate segments throughout 2005.”

While every research firm has given different figures, one thing is common-the PC market is

booming at double-digit growth rates. MAIT (Manufacturers Association of Information Technology)

estimates that the desktop PC market grossed 17.1 lakhs units in the first half of fiscal 2004-05,

registering a growth of 37 percent over the same period of the previous fiscal. With the Indian economy

booming, MAIT estimates that PC sales will touch the 40 lakhs mark in fiscal 2004-05.

The buoyancy in PC sales can be attributed to increased consumption by traditional industry

verticals such as telecom, banking, financial services and insurance, BPO, manufacturing and

government. Consumption also increased in non-traditional sectors such as education, retail outlets and

self-employed professionals.

In future, HCL’s hardware sales to the institutional segment are likely to remain stable, with

sustained hardware spending by all the verticals, especially the banking and financial services sector.

Besides, in retail hardware sales, a continued reduction of price points, facilitated in part by the recent

reduction in excise duties on PCs, is likely to reduce the price advantage of the small assemblers, and

augur well for branded PC manufacturers like HCL. In the medium term, HCL’s margins, despite its

sales tax advantages, may be affected by the likely removal of duty protection on manufactured PCs

from the year 2005.

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Current Market Share of various IT players in over all Desktop Market in 2005

Vendors Units

(2004)

Market

share(percent)

Units (2005) Percentage of Units

Shipped

Year-on-Year

Growth (percent)

HCL 232,169 9.2 4,43,535 13.7 91.04

HP 221,964 8.8 3,84,058 11.9 73.03

IBM 132,582 5.3 1,98,973 6.2 50.8

Total desktop market

Units (2004) Percentage of

Units Shipped

Units (2005) Percentage of Units

Shipped

Year-on-Year

Growth(percent)

Branded 911,403 36.2 1,589,016 49.2 74.3

Grey 1,608,752 63.8 1,643,694 50.8 2.2

Total 2,520,155 100 3,232,710 100 28.2

From the above figure we can clearly see that HCL emerged as the clear winner among the branded PC

companies with 34% or 13.7% of market share followed by 30% or 11.9 % of market share by HP. IBM

was third in the race with only 15% or 6.2% of market share of branded PC computers. Along with

becoming the market leader in branded PC HCL Infosystems also became 1Billion Dollar

company in April 2005.

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CHAPTER 2

OBJECTIVE

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OBJECTIVE OF THE STUDY

Analysis of the marketing strategies adopted by HCL Info systems Ltd. to become the market

leader in the field of Personal Computers.

Different marketing strategies adopted by HCL to compete with others.

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CHAPTER 3

ANALYSIS

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3.1 HCL: AN INTRODUCTION

In the early 70s, a group of young, enthusiastic and ambitious technocrats embarked upon a

venture that would make their vision of IT revolution in India a reality. Shiv Nadar and five of his

colleagues got together and in 1975, set up a new company called Micro comp. To start with they

decided to capitalize on their marketing skills. Micro comp marketed calculators and within a few

months of starting operations, company was outselling its major competitors. In 1976, Micro comp

approached UPSEC (Uttar Pradesh State Electronics Corporation) for help to set up a computer

company. Impressed by their technical and marketing competence, UPSEC agreed to set up a joint

venture.

On the 11th of August 1976 Hindustan computers Limited was incorporated as a join venture

between the entrepreneurs and UPSEC and with an initial equity of Rs. 1.83 Lakhs.

HCL Infosystems Limited (HCL Infosystems) has now become India’s one of the big technology

integration company. Over the years, HCL Infosystems has positioned its business operations to fulfill

its vision statement: ‘Together we create enterprises of tomorrow’. The overarching theme for the

company’s swift progression into the software and services arena, in India and globally, is evolving.

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Signifying a state of constant growth, the evolve theme is visible in the many ways that HCL

Infosystems has undergone a metamorphosis into becoming a complete IT solutions company.

The menu of HCL Infosystems global services broadly covers IT consulting and professional

services in the area of vertical applications, technology integration, ERP implementation and software

development.

This also includes a complete portfolio of systems and network services for development. This

also includes a complete portfolio of systems and network services for Facilities Management,

Helpdesks, Systems Supports and network and Internet Implementation. HCL Infosystems’ global

customers include Samsung, Government of Singapore, and AMAL insurance Jurong Port in Singapore

and Malaysian’s BSN commercial bank, SIA, DBS bank, May bank life assurance charted

semiconductors, Asia Matsushita and Shell Malaysia. Some of its global customer in the government

sector is Inland Revenue authority of Singapore, civil aviation authority of Singapore, Singapore power,

ministry of education, health and national development, telecom authority of Singapore and penang state

govt.

HCL Info systems’ chosen platform of total technology integration lends itself to some very significant

alliances with the global leaders. Among its partner are HP for high end AISCE/UNIX services and

workstation and HP Open view network management solution; Intel for PC and PC server building

blocks; Microsoft,novell and SCO AG solutions; Red hat ;Linux; Samsung; Pivota for CRM solution

and ORACLE Sybase and Informix for RDBMS platform.

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3.2 MARKETING STRATEGY

“Marketing Strategy is nothing but a combination of decision bearing on a various aspect of

marketing mix element.” There are Product, Price, Place, Promotion, Process, Packaging and Personal.

HCL concentrate on all aspects, that’s why HCL has very good hold on Indian market. It understands

the mindset of Indian customer very well because of it is a India based company. Strategy only then

success when it made to according to customer need and preference.

So an overview of marketing strategies, which HCL uses to continue its way behind success, is

discussed here.

1. For product planning :

[a] HCL take decision regarding their existing product along with future products. This is the

continuous process, which is done by top management of HCL.

[b] New product launching and product renovations is an activity which takes place continuously

here.

2. Management Information System

In this step they collect the details about competitor’s product. They saw the pricing, features,

quality, Advertisement, Packaging, and Promotion of those particular products. It is necessary to have a

good Information system to understand the consumer mind batter.

Market Segmentation:

We know that market segmentation means dividing market into distinct group of buyers with

deferent needs characteristic is or behavior. Who might require separate product or marketing mixes?

It refers to large heterogeneous market in to with smaller homogeneous parts in order to select

any one out than in which the company thinks it can satisfy customer more effectively different product

for different segmentation. There are different classes people are living HCL, like....

1. Lower middle class

2. Middle class family

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3. Upper middle class family

4. Higher class family

5. For larger the target is fulfill by the help of advertisement and Promotional Events.

Now HCL is targeting to those customers who use to see dream about it by launching its

new Computer at just Rs. 9999.

PRICING POLICIES:

Price refers to the value of product attributes. Expressed in monetary terms with a customer plays

or is accepted or affords utility. Value is referring to the quantitative aspect product relative to other

product. In HCL, pricing policies of work like as under

1. Management Information System First MIS show the price of competitors.

2. Parallel pricing policy

Bundle, marketing

Profit margin

They give to Channel Partner/demo center 6-8%, And company gets X% profit. HCL’s main

objective is service rather then profit. No doubt there is profit but pricing policy just to meet minimum

margin for getting competitive advantage against assembler’s market.

Company wants to maximize its profit than unit establishes higher policy its organization wants

to cover the large part of the market than obligation may establish negligible profit policy. “HCL

believes in wealth maximization rather than profit maximization.”

Sales Promotion:

We know those sales promotion short-term incentives to encourage purchase or sales of product

and services. Sales promotion includes

Consumer Promotion

Trade Promotion

Sales Force Promotion

Sales promotion refers to all efforts made by the firm to promote the sales of products. In HCL

for sales promotion gave special offer

To end-users

To institution

To corporate houses

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Total expenses HCL use to spend on promotional activities is just 3% of the sale.

Advertising Sales Promotion

(2% of sales) (1% of sales)

Press T.V. Radio out Door

30% 35% 10% 25%

Among all tools of promotion advertisement is given prime importance by HCL. That can be

seen from the above chart that more stress put on the Television Press and Outdoor media of

advertisement.

PROCESSING:

It is another important P of marketing these days. It includes quality standard during

manufacturing of a product. Its manufacturing unit at NOIDA was certified initially to ISO 9002:1994

by BVQI in 1994 and later on to ISO 9001:1994 in 1997. As of own, all our manufacturing units are

certified by BVQI as per ISO 9001:2000.

People involved in processing is also caring about Quality

Some other Important Strategies which HCL use in market are following…

Made-in-India strategy works for HCL Info systems:

Even as everyone was all set to bury Indian PC brands, HCL Info systems came out with a stellar

performance last year that proved that Indian brands still had the ability to win on home turf. There’s a

lot that other Indian players could learn from HCL Info systems’ strategy in PCs and other segments.

Gaurav Patra explains what this IT major got right, and analyses future prospects in the light of shifting

trends in the business.

Just when the whole PC industry was in the throes of a recession and analysts were screaming

negative growth rates, HCL Infosystems surprised quite a few when it registered a 27 percent growth

rate over the last year. The company gained the No 1 PC desktop vendor ranking for the year 2001, with

a market share of 8.6 percent. In fact, today it is one of the few Indian brands that continue to hold their

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own against the MNC brigade—Zenith’s the only other name that comes to mind. From a company that

used to sell boxes, HCL Info systems has now emerged as a leading systems integrator, selling solutions,

while also offering IT services and consulting services.

The HP-Compaq merger could turn out to be an advantage for HCL because one-plus-one

never equals two in this business. It is interesting to trace the transformation of a company that was

earlier identified by the ‘hardware’ tag to an ‘end-to-end solutions provider,’ with interests across

domains such as software, networking and consulting. A look at the strategy followed by HCL Insys

throws interesting pointers for the rest of the industry. The number one tag on the PC front (with the HP-

Compaq deal, HCL goes back to No 2 now) has come as a result of clever marketing strategies, and

aggressive expansions. HCL has always been very strong on the government front. But when things

started going bad on other fronts—for instance, when the metros were showing stagnation rates, HCL

Insys went ahead and expanded aggressively in B&C class cities to boost volumes. In addition, the

company initiated schemes like consumer finance to lure the reluctant PC buyer.

Different strategies for different segments:

But the strategy to gain market share in difficult times and reap benefits when the industry recovers has

come at a cost. For instance, industry analysts say that HCL has given massive discounts in the products

business to gain market share. Evidence lies in the fourth quarter (AMJ 2002) performance of the

company, where though the products and related services business contributed 95 percent of sales at Rs

382.94 crore, profits before interest and tax stood at just Rs 7.24 crore—56 percent of total profits before

interest and tax (PBIT). The profit before interest and tax margins were dismal at 1.9 percent as

compared to 4.4 percent during the quarter ended March 2002.

In addition to the PC segment, the company also took several innovative initiatives in other sectors to

boost revenues. Take for instance the strategy of the company in the notebooks segment. The move to

enter newer segments like education and consulting in the notebooks business has yielded great results.

Proof of success lies in the fact that HCL Insys has already bagged big orders from the Indian School of

Business and PricewaterhouseCoopers. The second part of the notebooks strategy has been to

aggressively woo the SME segment with newer, cost-effective models.

The telecom business has also recorded impressive growth. For instance, the company bagged telecom

equipment orders from IIT Kanpur for 5,000 lines of MD Ericsson EPBAX and 500 lines of an ADSL

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solution. Looking at the robust growth from this segment, the company has set up the India remote

support centre for providing support services to all HCL Infosystems’ customers.

And while there have been doubts on the long term viability of the retail ISP business, HCL Infinet, the

fully-owned subsidiary of HCL Infosystems, is betting big on its technical expertise to boost revenues.

Positive indications can be seen in the fact that the subsidiary has acquired 30 new corporate clients for

VPN implementation.

These new clients come from different verticals such as manufacturing, finance and the FMCG

industry. Company officials are also betting on the VoIP segment, which has recently been opened up to

ISPs for Net telephony, but there is still doubt on whether this sector will generate enough volumes for

any ISP, leave alone HCL Info systems.

To take advantage of the boom in the call centre business, the company has also started a unit that it

terms as ‘call centre consulting’. Under this initiative, the company will help prospective clients wanting

to enter the call centre business with its knowledge base of hardware and systems integration, and

experience in call centre operations itself.

Software services:

Though the majority of HCL Info systems revenues continue to come from hardware sales and related

services, the relatively small software services portion could be a surprise packet for the future. For

instance, though the software services part contributed just 5 percent of sales, margins have zoomed

from 6.5 percent in the quarter ended March 2002, to 29.4 percent in the quarter ended June 2002. The

company has a good de-risking model through this segment, and has spread its business over different

geographies. Going forward, the company expects 40 percent of revenues coming from the domestic and

export services, about 30 percent from products and system integration and about 30 percent from

software exports.

Other strategies:

In line with offering competitive pricing keeping in mind the price-sensitive nature of the Indian market,

HCL Info systems has made significant investments in the Professional Services Organization (PSO),

the Support Services Organization (SSO) and in its manufacturing plants at Noida and Pondicherry. The

build-up of the services business (both PSO and SSO) enables HCL Info systems to offer complete

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solutions as well as raise manufacturing volumes in line with international standards. The increasing

focus on integrated enterprise solutions has also strengthened HCL Infosystems’ SSO’s capabilities in

supporting installation types ranging from single to large, multi-location orders. The SSO, which

comprises of a direct support force of over 800 members, is operational at 150 locations across the

country and is the largest such force in the IT business.

One more important arm in HCL Info systems strategy has been the Frontline division that markets

national and international brands of computer systems (including Toshiba notebooks) and peripherals

within the country. With its extensive network of 800 resellers across 300 cities, the division actively

promotes the penetration of PCs in the home and the small office/home office (SOHO) segments.

HCL drives 'PC IN EVERY HOME' dream with EzeeBee Pride

For those who have been putting off their decision to buy a computer for affordability reasons, here's

some great news. Keeping its commitment to truly bring IT to the masses, HCL Infosystems, India's

premier information enabling and integration company, has broken the price barrier yet again, making

branded PCs more affordable than ever before. The company has announced the launch of a new PC

EzeeBee Pride that will be available at a very affordable price of Rs.12,990.

Positioned as 'value for money' range, EzeeBee is the result of the company's intense

efforts, led by the vision of Chairman & CEO Ajai Chowdhry, to make PC an affordable entity for the

masses. With a distribution focus on smaller towns as well as the Home and SOHO users, this path

breaking PC will be sold in all the HCL outlets across the country. The product comes with the quality

and support of HCL, the only Indian IT hardware company with a turnover in excess of USD 1.38

billion.

To ensure that high quality is maintained even at a low cost, the EzeeBee Pride PC is designed for high

performance. Built to boost productivity and improve response time EzeeBee Pride PC is powered by

the 1Ghz processor. The multimedia and Internet capable PC comes with the standard one-year warranty

has a 30GB hard-disk, 128 MB RAM, 15" color monitor, CD ROM Drive and is backed by the

countrywide support network. The PC will be ideal for home users and SOHO segments, offering all the

functionalities sought by this segment.

"It is my ultimate dream to see a computer in every Indian home. With EzeeBee, we hope to empower

more and more individuals with the power of computing. We believe that the true potential of IT can be

achieved only through mass IT penetration. In a country like ours, price is a huge deciding factor and

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one of the major barriers to achieving it." said Mr. Ajay Chowdhry, Chairman and CEO, HCL

Infosystems Ltd. "We have taken the lead in finding innovative ways to bring the price down by

introducing new technologies and products that we believe will not only best suit the requirements of the

home and SOHO segment, but also go easy on their pockets,".

The EzeeBee range has been designed and configured for use by value conscience first time users who

want to enhance their IT skills. It can be used by students for educational purposes, by the entire family

from learning to digital entertainment to work at home. It can even be utilized for increasing efficiency

in a small to medium business. Flaunting the trademark good looks of the range, the PCs also come with

optional bundles like the inkjet printer, UPS, speakers and web cams at an additional cost.

The range is manufactured and tested under ISO 9001 and ISO14001 certified processes. In

January'04, HCL Infosystems had launched Ezeebee at sub 15k price point HCL Infosystems is

country's numero uno PC maker and seller.

HCL Infosystems and Union Bank partner to make PCs more affordable. Lowest

ever EMI in India: Rs.499 for HCL Ezeebee:

In a country where only 11 out of 1,000 people own a computer, one of the key influencers is

affordability. HCL Infosystems, India's premier information enabling company, and the Union Bank of

India recently entered into a partnership that will make it extremely easy to fit a personal computer into

the monthly family budget. A HCL Ezeebee PC will now be available at an EMI of only Rs 499 per

month. This offer is available on an Ezeebee with Pentium 4 and Intel's Hyper Threading Technology.

Speaking on the occasion, Mr Ajai Chowdhry, Chairman & CEO, HCL Infosystems, said, "It is our

ultimate dream to see a computer in every Indian home. I am confident the offer introduced today will

go a long way in making this endeavour successful. If it is the cost of acquisition of a personal computer

that stops an Indian from owning a computer, then HCL has taken the responsibility of providing the

best financial deal possible, thereby empowering more and more consumers with the power of

computing".

This premium branded PC at Rs 499 per month is targeted at making the PC an affordable commodity in

Indian homes. A quality PC backed by an impressive customer support available across the country is

another step from HCL Infosystems in increasing PC penetration in the country. A wide reaching multi-

media campaign is being released to inform about this new initiative.

The interest rate on this scheme has been kept to the lowest possible rate that compares to that of typical

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consumer goods. This scheme has a host of other models with different configurations available, thereby

giving consumers a wide option to choose from.

Recent research has indicated that PC ownership can help a family in many ways. Prime reason being

the child's education, thus giving the child a diverse learning experience irrespective of city .HCL

Ezeebee can be used by all members of the family, from learning to digital entertainment to Internet to

work at home.

HCL Infosystems recently broke the Rs 15,000 price barrier by introducing the Ezeebee. HCL Ezeebee

has been created specifically to cater to the needs of first time Home PC buyer. With cutting edge

technology and ease of use features, this brand has found wide acceptance with the consumers across the

country.

HCL partners with Microsoft & Intel to revolutionize digital entertainment in

India:

Imagine the ultimate device that caters to all your entertainment needs. Visualize a TV, DVD, MP3

player, radio, gaming tool, web browser, video recorder all rolled into one. Envisage having the world of

home entertainment at your fingertips. Fantasy? Not if you experience the revolution that is Beanstalk

Neo.

The Beanstalk Neo, launched today by HCL Infosystems, India's premier information enabling and

integration company, promises to change the world of home entertainment for the Indian user. The

Beanstalk Neo has been specially developed by HCL Infosystems, utilizing the latest Microsoft

Windows XP Media Center Operating System and Intel's Hyper Threading technology. This latest

product from the HCL stable is available across the country through the company's channel network.

The Beanstalk Neo is a true convergence product with an unbeatable blend of futuristic style and

pioneering technology. The first thing that sets it apart are the stunning good looks, enhanced by a sleek

finish and a 17 inch flat LCD display system for that superb cinematic experience. An integrated digital

entertainment system which includes a LCD TV, DVD player, MP3 / CD player with a surround sound

system, live radio and television, wireless and broadband ready, the Neo comes with the convenience of

remote control so that you are not required to learn any controls or interfaces. The HCL Beanstalk Neo

is available at Rs 99,990/-, and comes with a one-year comprehensive on-site warranty.

Announcing the launch of the Beanstalk Neo, Mr Ajai Chowdhry, Chairman & CEO, HCL

Infosystems Ltd., said, "The Beanstalk Neo, without any exaggeration, will completely transform digital

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entertainment for the Indian user. The Beanstalk range, ever since its advent in 1995, has always brought

the best of breed technology to the Indian consumer and kept him in-step with the latest innovations

worldwide. We see a trend today where the user wants a multi-functional product combined with ease of

use. The Neo has been designed keeping the requirement of today's demanding consumer in mind.

Concisely put, the Neo is not just a new PC, it is a revolution."

Commenting on the announcement, Mr Rajiv Kaul, Managing Director, Microsoft Corporation Pvt. Ltd,

said, "The proliferation of various technology products and services, has complicated the life of the

consumer - and they are demanding simplicity, ease of use and holistic offerings that just work. The

Windows XP Media Center Edition 2004 is a great example of integrating software, hardware and

services to create simple and compelling entertainment experiences that enhance the lives of our users,

everyday. I would like to thank our OEM partner HCL Infosystems Ltd. in helping us bring this product

to the Indian market."

Built from the ground up to deliver the picture and sound quality you expect from a digital entertainment

center, the Beanstalk Neo lets you use one unified interface to:

Pause and rewind live TV and radio so you never miss a moment

Record an entire TV series or genre and watch shows at your convenience

Experience your digital photos, videos, and DVDs with friends and family

Put your world of music at your fingertips with an amazing jukebox

Get connected to a world of digital movies, music, and more - at your convenience

The HCL Beanstalk Media Center PC comes with a 17 inch integrated high-resolution, anti-glare flat

LCD monitor, with 1280 x 768 support - 16:9 aspect ratio. Among the features that make it the ideal,

easy to use entertainment powerhouse are a wireless keyboard and mouse, built-in TV tuner, DVD and

CD player/recorder, MP3 capability, an FM radio, gaming tools, a photo editor and a web browser. The

Beanstalk Neo can also create, edit, store and screen digital home movies and photos.

The Beanstalk Neois equipped with an Intel® Pentium® IV 2.8 GHz with Hyper-Threading technology,

800 MHz FSB and Windows XP Media Center Edition 2004 operating software, the most advanced OS

for PCs in the Home segment.

In addition to its multi-media features, this innovative Beanstalk PC offers the 'dream pack' with 5

Microsoft games; Microsoft works 7, as well as 100 songs, 5 movies and 10 karaoke.

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HCL FORMS A STRATEGIC ALLIANCE WITH BULL TO LAUNCH A NEW RANGE OF

SCALABLE ENTERPRISE CLASS SERVERS ON OPEN ARCHITECTURE:

HCL, India's premier information enabling company, today announced a strategic alliance with Bull, a

leading Europe based company, to launch HCL scalable Enterprise Class Servers on Open Architecture.

The new HCL servers will provide customers the proven capability and mainframe-class reliability of

the traditional proprietary RISC platforms on Open Architecture at a much lower total cost of

ownership.

"The biggest challenge at the core of the enterprise has always been to gain the performance,

headroom and reliability of high-end 64-bit computing, without the high cost and complexity of

proprietary RISC architecture." said George Paul, Executive Vice President - Marketing at HCL "This

partnership will allow us to offer our customer a complete range of solutions for the Core of the

Enterprise on Open Architecture and help them move beyond proprietary RISC platforms."

Today enterprises are looking to break free from the barriers of proprietary RISC platforms and

now with more than 5000 validated applications available on Itanium® both on windows and linux,

enterprises finally have enlarged options.

The partnership will enable HCL to address high-end requirements of its customers for the

core of the enterprise, in areas such as large-scale databases, ERP applications, Data centers, High

Performance Computing requirements of Scientific and Research Segment etc. It will enable Bull to

expand the geographical market reach of its technologies, establishing its presence through HCL's

extensive network of over 170 offices and 300 service centers spread across the country.

The new range is based on Bull's Nova Scale® servers, powered by Intel® Itanium® 2 processors and

Bull's FAME (Flexible Architecture for Multiple Environments) technology. Using market-standard

building blocks, the FAME architecture represents a technological breakthrough for high-end, mission-

critical servers, delivering significant improvements in price/performance.

This launch further strengthens HCL's Infiniti Global Line Servers, which has fast emerged as

a preferred brand amongst a cross-section of markets in India including Manufacturing, Telecom,

Finance and Banking, the Government, Defense Forces and Internet Service Providers.

Notably, HCL has shown phenomenal growth in server segment by registering a market share

of 19.6% for calendar year 2005. This launch is yet another demonstration of the company's strong focus

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on the Server Business and its commitment towards the Indian Customers by providing the right

technology, at the right time, and at the right price point.

While in Delhi and commenting on the announcement, Michel Lepert, Executive Vice

President and General Manager of the Products and Systems Division at Bull, said: "India is a high-

growth market with a strong interest in new technologies such as the ones built into our Nova Scale®

servers. We are totally committed to supporting HCL, and given the work that we have already done

together to move the partnership forward we are confident that HCL customers will immediately benefit

from very competitive high-end solutions".

Mr Surendra Arora, Director - Customer Solutions Group, South Asia, Intel said - 'Intel has

worked with the industry over the last six years to develop a rich eco-system of highly scalable and open

standard solutions. We have a large number of OEM's, operating systems and 5000 applications running

Intel® Itanium® processor family-based platforms. We are now very pleased to collaborate with HCL

Infosystems and Bull, a member of the Itanium(r) Solutions Alliance, to enable the Indian IT customers

with mission critical computing needs to benefit from the outstanding performance, reliability,

scalability and availability delivered by Itanium(r)-based systems.'

To share the benefits enterprises can derive from this union, HCL, Intel & Bull, have jointly

organized exclusive seminars in Delhi, Bangalore & Mumbai for CIOs this week.

Bull Nova Scale® servers have gained IT market recognition and won large customers, both

end-user IT organizations and OEMs. They are used notably as data base servers and application servers

as well as in HPC (High Performance Computing) applications. A prime example: Nova Scale® servers

are the foundation of the largest scientific computer ever delivered in Europe, which is currently under

installation and will be operational by the end of 2005.

HCL launches India's first Windows XP enabled Beanstalk Media Center PC:

HCL Infosystems, India's premier information enabling and integration company, today announced the

launch of the HCL Beanstalk Media Center PC, which makes it the first Indian brand to do so. The PC

has been specially developed by HCL, coupling with newly designed interface of Microsoft Windows

XP Media Center edition, to completely revolutionize digital entertainment in India. This latest PC is

available across the country through HCL's channel network.

The HCL Beanstalk Media Center PC is all set to move from the study to the living room and

emerge as the command centre for an exploding array of home entertainment options. It will provide

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users ultimate convenience of productivity, connectivity and digital entertainment. The advent of the

Beanstalk Media Centre PC range in the market marks a coming of age for the Indian Home PC.

The HCL Beanstalk Media Center PC, comes with a remote which can be used for viewing TV,

DVDs, listening to music, viewing photos, even checking your mail, and switching between media at the

touch of a button. Thus giving the user a fantastic, new entertainment experience. The HCL Beanstalk

Media Center PC range starts at Rs. 60,990, inclusive of one-year comprehensive on-site warranty. The

HCL Beanstalk Media Center PC offers multiple models; on the offer is a new breed of living room PC

with sleek, compact, futuristic cube design as well as stunning black PCs with contemporary design.

Announcing the launch of the Media Center, Mr. Ajai Chowdhry, Chairman & CEO, HCL

Infosystems Ltd., said, "We have always asserted that our aim is to keep the Indian customer in-step

with the latest technological innovations worldwide. The Beanstalk Media Center PC that we have

launched will, without any exaggeration, completely transform the digital entertainment. Today, users

are demanding more from their home PCs and entertainment is all set to become mainstream consumer

activity. The Beanstalk has, as always, risen to the occasion." The Beanstalk, India's first home

computer, was launched in 1995 with a view to addressing the fast emerging home market, and since

then it has always been the first to embrace the latest cutting edge technology.

Commenting on the announcement, Mr. Rajiv Kaul, Managing Director, Microsoft Corporation

Pvt Ltd, "With every release of Windows, we've aimed to address immediate and emerging customer

needs, while pushing the barrier on innovation. The Windows XP Media Center leverages cutting edge

innovation to provide rich, integrated entertainment experiences to a host of users, and we are confident

of the success of this offering in India." HCL Infosystems is the first in the country to launch the Media

Center.

"The industry has made great progress toward developing interoperability guidelines as well as

innovative products and services that are helping make the digital home a reality for consumers. The

latest HCL Beanstalk Media Center PC with Intel(R) Pentium (R) 4 Processors with hyper-threading

Technology can handle the most demanding computer user's day," said Ketan Sampat, President Intel

India. "These individuals can start their day with a multitasking work environment, move on to encoding

home movies to DVD while playing music files, and end their day with the latest multiplayer Internet

games. With high-performance PCs, consumers can dramatically reduce the time it takes to encode

digital media such as music, pictures, and movies. "

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One of the biggest advantages that HCL Beanstalk enjoys over the competition is that it comes

with the world's best sound and display system. The product comes with the Bose FreeStyle speaker

system, first time ever to be integrated with a PC. The Bose FreeStyle system delivers surround sound

effect with just two speakers and a sub woofer to provide most of the performance benefits of a 5-

speaker surround sound system. This would give the user a richer digital experience.

The HCL Beanstalk Media Center PC comes with a Dyna flat colour, high-resolution, anti-glare

monitor range, with a unique space saving design available in size 17" and above.

Among the features that make it ideal for living room usage are a wireless keyboard and mouse, built-in

TV tuner, DVD and CD player/recorder, MP3 capability, FM radio enabled; and ready for editing,

storing and viewing digital home movies and photos.

The HCL Beanstalk Media Center PC is equipped with an Intel® Pentium® IV 2.4 HT and 3

GHz processor and the Windows XP Media Center Edition operating software, the most advanced OS

for PCs in the Home segment. In addition to its multi-media features, this HCL Beanstalk is packed with

a variety of rich & user-friendly bundles such as the Microsoft Encarta encyclopedia, and very rich

School education software .

HCL Infosystems and Sun Microsystems partnership forges ahead with major wins:

The successful partnership between HCL Infosystems, India's premier information enabling company,

and Sun Microsystems Inc. (Nasdaq: SUNW), has taken a leap forward with two major wins. The deals

have been signed with the Government of Andhra Pradesh for the complete automation of VAT services

and the Oil and Natural Gas Commission (ONGC) for the installation and up gradation of Sun Systems

for their projects Shramik and Kuber, which are HR and Finance packages respectively.

Announcing the orders, Mr George Paul, Associate Vice President - Marketing, HCL Infosystems

Limited, said, "The wins further strengthen the HCL-Sun relationship. Our partnership with Sun has

been extremely successful, and all our plans and expectations are being realised."

In February 2009, HCL Infosystems and Sun signed a System Integration Agreement with HCL

Infosystems. In July 2009, the companies announced an expansion of their relationship by entering into

a Enterprise Distributor Agreement. As per the agreement, HCL Infosystems will distribute the complete

line of Sun enterprise products, leading to a substantially increase in the market base for Sun. The data

centre solutions are the latest offering from the HCL-Sun alliance. "Our data centre solutions offer a

state-of-the-art infrastructure for information technology. Given our expertise and Sun's unmatched

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leadership in this arena, we expect our solutions to meet and exceed the needs and expectations of our

customers," Mr Paul added.

The project won from the Government of Andhra Pradesh (GoAP) involves the setting up of a

data centre for its Commercial Tax Department (CTD). The centralised data-base, located at Hyderabad,

will use Sun Microsystems' servers and data-centre solutions to offer inter connectivity to various tax

collection offices across the state. GoAP has taken the initiative for the complete automation of Value

Added Sales Tax services. All the employees of the Commercial Tax Department located in various

locations across the state would be able to connect to the central data centre, streamlining the working of

the department. Among Indian states, Andhra Pradesh has been the leader in deploying a series of

initiatives to make IT citizen centric. Mr. Paul said, "There is a distinct movement in the country to

make IT a citizen centric tool, and we are proud to be part of the initiative". HCL envisages a substantial

demand for the data centre solutions emerging in India after the government announced an investment of

2.9 billion USD in IT infrastructure in its tenth five-year plan.

The HCL Info systems deal signed with ONGC comprises of supplying, installation and up-

gradation of Sun Systems in the ERP Data Centre for projects Shramik and Kuber, which are HR and

Finance packages respectively. It would involve developing, testing and deploying Sun servers and

storage systems in production environment of HR systems on SAP R/3 version 4.6 B.

The next big IT wave to hit India:

After software, call centers and business processes, it's now the turn of IT departments to be off

shored to India. That's right, IT departments. The IT infrastructure - everything from data centers,

networks, servers and storage to desktops - of a number of the world's top corporations are now being

"remotely" managed from India.

Technology research firm Gartner calls remote infrastructure management services "the next big

wave" of Indian outsourcing deals; Deutsche Bank believes it will be the "growth engine" for Indian IT

services companies over the next few years. The trend has picked up in the past two years, and the

potential estimated is huge.

According to industry body Nasscom, different estimates put the global IT infrastructure

management services market between $86 billion and $150 billion; and since up to 60 per cent of the

overall IMS pie may be delivered through the "global delivery" offshore model, the current market

potential for RIM translates to no less than $55 billion.

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Last year, IMS-related IT exports from India were worth approximately $300 million, which

means less than 1 per cent penetration - that's huge potential, indeed.

Deutsche Bank projects exports in the segment to grow at around 50 per cent over the next three

to four years, while Nasscom estimates the growth could be in high double digits or even triple digits for

the next several years.

So what makes Indian vendors hot contenders for a much bigger pie and why are corporations the

world over preferring the offshore delivery model through RIM?

Who's who:

To start with, outsourcing infrastructure management is nothing new. In fact, global IT services

giants IBM and EDS have been doing it since the 1970s and 1980s. Even today, IBM, EDS, HP and

CSC dominate this business.

A number of mid-sized players such as Perot and Unisys, too, have strong presence. The

traditional business model that these companies follow - what some analysts also call a lock-stock-barrel

approach - is to take over or buy the IT assets (such as servers, storage and networking equipment) of

clients and then sign long-term maintenance contracts with them, taking care of all the client's IT

requirements; that is, total outsourcing of IT infrastructure.

Apart from a total solution, where the client didn't have to bother about his IT needs, this model

offered clients a significant credit risk arbitrage, where clients with relatively weaker balance sheets -

representing a higher credit risk - could rebalance their books by transferring their assets to a vendor

with a lower credit risk.

Says Nasscom vice president Sunil Mehta, "Recent trends indicate a distinct shift from total outsourcing

to 'selective outsourcing' [the model generally followed by Indian vendors offering RIM services],

which has been more successful than full IT outsourcing contracts."

According to a study by technology research firm Forester, selective outsourcing - which implies

breaking up the different IT functions and outsourcing them to different vendors based on their

competencies and specialized skill in each area - has an industry success rate of 77 per cent compared to

total outsourcing, which has a 33 per cent success rate.

Explains Vineet Nayyar, president, HCL Technologies, "Today, IT is so strategic to the business

needs of an organization that most firms don't opt for total outsourcing. CIOs want control over their IT

strategies and functions, which, unfortunately, total outsourcing doesn't offer."

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Agrees Venkataraman K N K, general manager, managed services, Wipro Technologies, "Many

customers want to control the destiny of IT in their organization. They see IT as a differntiator for

business and, thus, do not want others to take over their IT architecture or controls. But then, there are

others too who do not want focus much on their non-core competency, and they prefer total

outsourcing."

Analysts and studies point out some of the drawbacks of total outsourcing. One, the model

doesn't offer much flexibility. The contracts are long-term - between five and 10 years - and the price is

fixed.

So if there's a variation in volumes - for instance, if fewer servers or desktops are required at a

later date - the pricing doesn't change. Second, the contracts are based on the current pricing of the assets

and technology; which means price drops - common in IT - will not benefit the client.

Third, service level agreements are generally based on the prevailing market scenario, so if the market

becomes more competitive, again the client benefits nothing. Says HCL's Nayyar, "SLAs don't

necessarily get modified. These are take-it-or-leave-it contracts where once the client hands over the

keys of his kingdom, he loses control over it. And, of course, he can't take back the key till the contract

ends."

HCL Comment, a part of the HCL Group, and Wipro were two of the early movers into RIM

services; both companies began offering RIM services about five years ago. Wipro currently boasts 165

accounts from G7 countries, managed by 7,000 employees, while HCL currently has over 20 Fortune

500 clients and 2,200 employees. Both companies also claim "significant" domestic business in the RIM

space. The other major players are Tata Consultancy Services, Infosys, Patni and Satyam.

Many of the players in the RIM business have gained from their early expertise into the managed

services or networked management space. TCS, for instance, has been offering infrastructure

management services to domestic clients since the 1980s, much before the boom in the applications

development market. Says P R Krishnan, global practice head, infrastructure services, TCS, "The new

word added to infrastructure management is 'remote'. And as customers became confident with the

offshore model there was a growing confidence in them to look at other models as well."

IMS has been relatively new at Infosys, its unit was established four and a half years ago. Currently it

provides services to over 50 clients.

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How HCL made it big

As an early mover in the RIM industry, says Nayyar, HCL followed a "Blue Ocean" strategically

approach. "We focused on uncontested market spaces and creating new ways of offering the old offer -

margins were also higher," he adds. This is in stark contrast to the "red ocean" of the software and BPO

industries, where competition was intense, margins low and the offerings commoditized.

Realizing that the biggest IT space to tap was - surprise, surprise - not software development,

but IMS, HCL searched for new drivers and demands in this space, applying its blue ocean strategy.

Early market research by the company and its interactions with players into infrastructure

management deals revealed that CIOs were looking for higher flexibility and transparency in IMS.

They wanted more variability in business models, where prices were not fixed and pricing

models were transparent. As also, transparency into IT functions. Further, CIOs were against seven- or

10-year SLAs, and preferred SLAs to be modified on a year-on-year basis.

HCL found the answer in what it calls collaborative- or co-outsourcing, where the client doesn't

necessarily outsource its control over IT, but rather outsources different tasks to the vendor.

HCL offers RIM services where it acts as a task partner. It manages the entire data centre, but the client

decides which technology to use and what to add to or subtract from the data centre. It manages and

monitors various applications, but the client decides when to give priority to which applications. Points

out Nayyar, "All the major strategic decisions are made by the client; of course, we act as an advisor on

strategy."

Still, collaborative outsourcing wasn't enough to create enough differentiation in the market -

both in terms of cost and technical strength - and attract substantial international clients.

That's when HCL decided to handle infrastructure management for international clients "remotely" from

India. It developed core capabilities and tools, so that sitting in India it could log on to data centres,

networks and security devices globally, and manage them out of India.

For instance, the company created two tools called Smart Manage and Dashboard. HCL claims

that while Dashboard provides 100 per cent transparency into operations -- the client was able to see

what HCL was doing in real time -- Smart Manage provides transparency to infrastructure utilization --

the customer can see whether he needs more network bandwidth and more memory, or not.

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3.3 COMPETITORS

ABOUT HP:

HP is a company unlike any other. We serve everyone from consumers to small and mid-sized businesses to enterprises to public sector customers with an extensive portfolio of market-leading solutions specifically designed to meet the needs of each customer segment.

Our annual R&D investment of $3.5 billion (USD) fuels the invention of products, solutions and new technologies. We produce an average of 11 patents a day worldwide. HP Labs provides a central research function for the company which is focused on inventing new technologies to improve our customers' lives, change markets and create business opportunities.

Millions of people around the world use HP technology every day. HP is:

the largest consumer IT company the world's largest SMB IT company a leading enterprise IT company

Our strategy is to offer products, services and solutions that are high tech, low cost and deliver the best customer experience. Our team of 151,000 employees does business in more than 170 countries. Revenue reached $86.7 billion for the fiscal year that ended October 31, 2005. HP has a significant presence in all market we serve

Consumer — leadership in handhelds, notebooks, printers and digital cameras for rewarding experiences

Small and medium business — market-leading products, solutions and services for simplified ownership

Enterprise — a full portfolio of leading products and services for building an Adaptive Enterprise

Public sector, health & education — experience and alliances for lower costs and increased efficiencies.

HP is proud of our people, our standards and values, and our deep commitment to global citizenship. Since our first year in business in 1939, HP has given back to communities through philanthropic donations of money, equipment and time.

Today, we employ new models of engagement and new business and technology solutions to help more people around the globe to participate in the world economy via information technology.

Stanford University classmates Bill Hewlett and Dave Packard founded HP in 1939. The company's first product, built in a Palo Alto garage, was an audio oscillator—an electronic test instrument used by

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sound engineers. One of HP's first customers was Walt Disney Studios, which purchased eight oscillators to develop and test an innovative sound system for the movie Fantasia.

HP Halo — A better way to do business

Halo is a person-to-person collaboration solution that lets you meet with colleagues 10,000 miles away as if they were in the same room with you. With Halo, specially designed studios are installed at your company and connected by a dedicated network that enables any Halo studio to connect to any other Halo studio — anywhere in the world — with just a few mouse clicks. HP makes it simple for you by managing the network and the Halo studios, so you can focus on connecting with the people in front of you with no distractions.

All businesses, no matter how large or geographically dispersed, depend on human-to-human interaction. Sometimes personal contact is the only way to make things happen. Halo helps companies bring people together to reach their ultimate goals of accelerating decisions, bringing products to market sooner, integrating distant teams, improving efficiency, and staying ahead of the competition.

Until now, video conferencing and conference calls have been the only way to attempt to meet without traveling. But Halo is as different from video conferencing as your new laptop is from a 1970s-era calculator. No other technology can come close to bringing people together and accelerate business the way Halo can.

When you visit one of our Halo studios for a demonstration, you'll see images that are full size and clear, so your colleagues' table appears to begin where your table ends. They raise their eyebrows, you see it. They speak, you hear instantly — there's no delay.

It's as if you're all sitting at the same conference table. But instead of traveling across the globe to collaborate with your colleagues, you only have to walk down the hall.

What makes this so special? Much of the way we communicate with each other is nonverbal, which is why we go to such great lengths for business travel. In face-to-face meetings you can see people shrug, smile, even roll their eyes. Halo is the only technology that can completely embrace the nonverbal aspects of your meetings.

Because Halo makes it so easy to meet, you're more apt to meet. You can speed up project development. Hear suggestions. Make approvals. Streamline decisions. And shrink gaps in understanding between team members of different cultures — a boon in our ever-flattening world. Halo makes it possible for you to do business in an entirely new way.

HP Rolls Out Most Comprehensive Line of Digital Entertainment Products and Services in Its History

HP introduced the most comprehensive line of digital entertainment products and services in its history at the annual Consumer Electronics Show today.

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The company rolled out nine high-definition TVs, four consumer notebooks and a digital entertainment desktop PC, in addition to seven feature-rich, ultra-compact digital cameras and a home movie service from Snapfish, HP's online photo service, that allows customers to view, store and share their digital videos online.

Several industry firsts were part of the launch, including a TV that allows consumers to view and enjoy video, music, movies and photos stored on individual PCs throughout their homes and that also provides them with direct Internet access. HP additionally revealed a wireless camera dock and an in-camera technology that creatively enhances photos with the touch of a button.

While the announced products span from TVs and media centers for the living room to notebook PCs for those on the go, they are all designed to enhance and simplify the digital experience for consumers.

"HP's heritage of advanced technology, support and services enables us to connect a rich suite of digital entertainment and imaging products in ways no other company can," said Satjiv Chahil, senior vice president of marketing, Personal Systems Group, HP. "This integration gives consumers a compelling entertainment experience that helps them to easily capture, share, print and enjoy their digital content anywhere and anyway they want."

HP notebooks feature latest in digital entertainment technologies

The four new HP consumer notebook PCs include the latest versions of the award-winning HP Pavilion dv1000 Series Entertainment Notebook PC and HP Pavilion dv8000 Series Notebook PC, which bridge mobile computing with the latest in digital entertainment technologies.

In addition to a built-in webcam, the HP dv1000 series includes an updated version of HP QuickPlay, which allows users to watch movies, listen to music and now view photos – all without a full system boot. The HP dv8000 series is now available with Microsoft Windows® XP Media Center Edition on select models to watch, record and pause live TV(1) and easily view, edit and share digital media.

The dv8000 series is now available with HP Ultra BrightView technology – for a similar viewing experience to that of a plasma or LCD display – and the fastest processor in the AMD Turion™ family.

Capturing and sharing creative photos and video

HP's new line of sleek, pocket-size digital cameras features bigger, brighter LCD screens, an on-camera button for ordering and sharing photos through Snapfish, and new in-camera technologies that boost creativity and help consumers take better pictures.

In addition to unveiling the industry's first wireless camera dock, HP added HP Design Gallery to its award-winning line of Real Life technologies. The Design Gallery lets consumers add creative touches such as borders, artistic effects and color tints to their photos with the touch of one button on the back of the camera without using sophisticated software on a PC.

Expanding beyond photos, Snapfish has become the first major online photo service to offer a home movie service. Consumers can now easily access, view, store and share their digital videos from digital

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cameras and mobile phones online. The service uses Snapfish-developed technology that recognizes and converts most digital video formats to a common one that is playable through almost any Internet browser. Available now, the service is free for the first month and costs $2.99 in subsequent months or $24.99 annually.

Expanding digital entertainment on the desktop; PC service plans launched

The HP Pavilion Media Center TV m7300 Series PC makes it easier than ever to view, pause and record live TV as well as store, share and enjoy photos, music and home videos. The latest model in the HP Media Center PC line, the m7300 series truly enables the living room digital entertainment experience with its optional wireless keyboard, mouse and remote to control content from up to 10 feet away. Optional integrated Wi-Fi connectivity broadens the PC's capabilities to almost anywhere in the home.

HP also introduced two service plans that are designed to give consumers with technology questions a place to turn. First, Smart Friend by HP is similar to a tech support advice line. Customers can buy two calling plans – 30 minutes for $59.99 or 60 minutes for $99.99 – to get their "how to" questions answered. The second service, HP PC Tune up Service, is available for $99 and features specially trained tech "mechanics" who guide customers through the tasks needed to help make PCs run at their best.

These services are the latest additions to HP Total Care, HP's comprehensive consumer service and support program, which was recently recognized by J.D. Power and Associates for consistently providing an "Outstanding Customer Service Experience."

It has constantly generated interest of trade through innovative offering like P4 multimedia PC

price below 25,000 and which basically a T.V. cum PC with Internet connection. It has 4,000 dealers

above 30% are in class B & class C cities giving it the reach requirement to generate volume from lower

meddle segment of customers.

In 1993, Vectra was the first foreign pc to be marketed in India. How ever its J.V. with

HCL run into trubble and HP reentered in the Indian PC market in early 1998. By that time, IBM and

Compaq had entered and established their brands at the premium end. HP immediately made a dent in to

the market through its attractive processed PC’s bundled with peripherals.

Since than, HP and Compaq have been engaged in a relentless price war too woo the homebuyer.

According to IDC, HP, and moved up to the No. 2 brand behind the HCL in the quarter of 2004.

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IBM:

IBM has a storied history of inventing technology & applying it to the needs of business. We have doneSo over many decades, through many changes in technology and we’re doing it again today..

Many businesses invent & commercialize technology others are experienced in helping client transform their enterprise for competitive advantage. Their enterprises for competitive advantages. IBM is unique in the depth of its capacity to do both. This is what we mean by innovation. This is about more than being an innovation. Computer or IT company for us, innovation is a business model an organize principle. Our fidelity to this model has enable IBM to remain a leader in our industry through multiple eras. It commits IBM to reinvent itself in the products and services we offer client as well as in our internal operations, as technology, its possible application and our client needs evolve.

Understanding IBM’s business model and its consequences for our client relationships, workforce

strategy, management systems and economics is key to understanding why and how we have

transformed the company over the past few years. And that, in turn, is the basis for our optimism about

IBM’s ability to capture the most attractive marketplace opportunities now emerging.

A CENTURY OF INNOVATION:Although IBM began life as a maker of clocks, scales, electromechanical tabulators and other industrial equipment, it has never defined itself in terms of particular products or technologies. Even when the company emerged as a leader in “computation,” it was constantly developing new kinds of computational technology and new ways of applying it — from automating the new U.S. Social Security system with punch card tabulators in the 1930s; to pioneering electronic banking, retailing and airline reservations with the mainframe in the second half of the 20th century; to setting a standard for and driving the commercialization of personal computers in the 1980s.

The one, near-fatal exception occurred during the late 1980s and early 1990s. For the first time in IBM’s

history, the company failed to adapt to changes in technology, competition and client needs, despite the

fact that IBM itself had created many of the disruptive technologies of that time. The company remained

heavily dependent on its highly successful innovation of the prior era: the mainframe, and all of the

businesses, distribution channels and economics that hinged upon the mainframe’s continued

dominance. However, the rise of alternative, lower-cost technologies, a new computing architecture, the

proliferation of niche competitors and changes in client buying patterns combined to overwhelm the

company and led to large market-share and financial losses.

The hard-learned lessons from that period are directly relevant today, in at least two respects. First, the

IT industry is again undergoing fundamental change on many levels simultaneously, which will once

more create winners and losers. Second, many of the actions IBM took to recover from its near-collapse

put it in a strong competitive position for this new era, a position that the company has substantially

strengthened in recent years.

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IBM, forced to adjust to new realities, did so across the board. This included entering and building

significant businesses in enterprise software and services — markets which together grew from 49

percent of industry revenues in 1995 to 59 percent in 2004. For IBM, software and services today

constitute 16 percent and 48 percent of the company’s total revenues, respectively.

IBM’s gross profit margins in the mainframe era were unsustainable. So the company recalibrated its

economic and cost structure to be competitive, while maintaining margins sufficient to fuel our high-

value innovation business model. It created distribution and go-to-market channels to reach new

decision makers and to increase sales coverage. It migrated all of its hardware and software platforms to

high-performance technologies. And it shifted from proprietary to open architectures.

These capabilities have been dramatically enhanced and augmented in recent years. Today, IBM’s

strengths in business consulting, systems integration, IT and business transformation outsourcing, open

enterprise software and high-performance hardware provide the company with a strong hand to capture

the most promising opportunities that lie ahead. These opportunities involve doing new kinds of work

for clients — work that is deeper and more complex, and for which traditional IT companies have not

typically competed.From its start, the IT industry has been characterized by the cycle of innovation and commoditization — and with it, high risk and high reward. Companies that create new, high-demand technologies and services enjoy, for a time, barriers to entry and superior margins and pricing power, for the simple reason that there are few or no other providers of that technology or service. However, alternative technologies or capabilities inevitably emerge, decreasing or eliminating the innovator’s advantages. In short, that segment of the industry commoditizes. There are still attractive opportunities to be pursued, but with much less profit potential.

This innovation-commoditization cycle has never been more pronounced than it is today, and it forces distinct choices for both competitors and investors in the IT industry. Winners can be the innovators — those with the capacity to invest, manage and leverage the creation of intellectual capital — or the commodity players, who differentiate through low price, economies of scale and efficient distribution of other parties’ intellectual capital.

Perhaps the greatest risk is to get squeezed in the middle — being attacked by low-price competitors, while lacking the expertise and intellectual capital to keep up with the most aggressive innovators.

Understanding, anticipating and managing the forces of innovation and commoditization are essential to increasing shareholder value and mitigating risk. This is a core aspect of IBM’s business model, and it has allowed the company to create value for clients and investors for nearly a century.

Background

IBM is aligned around a single, focused business model: innovation. IBM takes its breadth and depth of insight on issues, processes and operations across a variety of industries, and invents and applies

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technology to help solve its clients' most intractable business and competitive problems. Although we remain committed, as ever, to lead the development of state-of-the-art technologies, and the products and service offerings built around them, we measure ourselves today by how well we help clients solve their biggest and most pressing problems

Advert is ing then and now

Pioneering and Passionate: IBM’s Tradition of Reaching Everyone in the MarketplaceIBM's new accessibility ad campaign focuses on what people can do, not what they can’t. In one ad, a Deaf man “hears” the demands of his employees. In another, a blind woman “sees” changes in the marketplace.

These ads continue IBM’s legacy of award-winning advertising, which represents everyone in the marketplace — whether Curtis Mayfield, a stroke victim using voice-recognition technology (1997); Joyce Massingill, a Black aerospace engineer (1969); or Carl Berman and Mitch Goldstone, a gay couple who own a photo shop (1998).

Passionate about diversity

Today, representing the diversity of the marketplace is a strategic mission. "We're passionate and almost maniacal in this regard," says Lisa Baird, vice president, Worldwide Integrated Marketing Communications.

To increase its business, IBM is focusing on newer segments, such as medium businesses and constituency groups. How do you get the attention of constituency groups? You start by representing them in your advertising.

"When people can see themselves in our advertising," Lisa adds, "they can connect with us." Casting ads and conveying messages must hit the right note, however, to be effective. To ensure positive portrayal of constituency groups, IBM recently developed casting guidelines for its ad agencies worldwide.

IBM also sponsors key community events, such as La Familia Technology Week during Hispanic Heritage Month, Black Family Technology Awareness Week during African American History Month, and advertising in Gay, Lesbian, Bisexual and Transgender (GLBT) journals during Gay Pride Month.

"Advertising drives people to learn more," Lisa says. "For us, that means creating interest in our solutions, products and leadership message."

Recognizing subtle differences

When it comes to marketing to constituency-owned businesses such as women, Asian, Black, Hispanic and Native American businesses, IBM applies the same go-to-market strategies as it does for any business — reaching out through business partners, employing a 1-800 number or ibm.com.

Within a specific constituency market, IBM first identifies which businesses make the most sense to connect with. Then, the IBM determines the most efficient way to reach each of them — whether through individualized marketing or a creative combination of IBM's go-to-market strategies.

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IBM business partners then help in generating demand and selling IBM solutions to businesses. For example, Esource Systems and Integration, Inc., an IBM-authorized business partner based in Huntersville, North Carolina, sells IBM solutions which contain IBM software and hardware products. This business partner provides technology solutions for government agencies and commercial customers to solve business problems.

IBM also enters the business community through professional associations and organizations. Such groups generate interest in IBM and may even help IBM identify new business partners. By sponsoring and participating with them, IBM is able to communicate its message of value to the member businesses.

"We're saying, in effect, to our constituency customers, 'We know you're out there and we want to work with you to make your businesses more profitable and productive,'" says Rai Cockfield, vice president, Market Development. His group is responsible for marketing to businesses owned by women, Asians, Blacks, Hispanics and Native Americans.

While focusing on small- and medium-sized businesses, marketing to constituencies is all about building relationships. By working with business partners and owners, IBM demonstrates it speaks a community's language and recognizes its culture. IBM then closes the equation by helping businesses understand how they can reach their potential.

Finding out each segment's needs requires a willingness to break with old assumptions and "go places where you don't usually go." While acknowledging that everyone in a segment is not the same, it's necessary to recognize "subtle differences" that exist between constituencies — such as one being more "relationship-oriented" or "techno-savvy."

Even so, Rai maintains all people prior to a purchase ask, "Does this product or service meet my need? Is the company reputable? And is the price reasonable?" Today, he adds a more pressing question, "Are you reaching me in the way that I see myself?'

"That's what endears a person to a company and a product," he says.

Corporate Securi ty Mission StrategySecurity is a hot topic. It grabs the headlines. Lots of market research has been done and there are many views of the information security market, yet by any measure the market is poised for substantial growth. The information security opportunity is projected by IDC to grow from $4.5b in 1996 to $13.5b in 2000, with a 31% CAGR. Security is the enabler to e-business. IBM, along with its business partners has security solutions to help companies conduct business securely. IBM is serious about security and has a strategy to create a mindshare that IBM means I/T security. IBM has decades of experience designing and implementing security systems around the world. Our customers want their business systems to be secure. They want products and services based on open standards. They want an effective security management system and they want access to experienced professionals for advice and assistance in implementing security products and services. Currently, no company can claim the depth and breadth of security offerings that IBM can, making security one of the biggest differentiators for the IBM brand. Many of these focus areas, because they are "for the greater good" of IBM and not justifiable from within one division's

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budget alone, suffered significant budget cuts in 1997-1998. This adversely impacted our ability to capture mind and market share as competitors have strengthened their positions by filling out their own security value nets through partnerships, mergers and acquisitions. The SecureWay brand pulls the many aspects of security within the IBM company together. Current work underway to define security suites will further enable us to compete in this space. IBM offers the industry's most extensive and comprehensive portfolio of security products, solutions and services under the umbrella of the SecureWay brand. The offerings come from all the divisions within IBM. The SecureWay brand is currently the security rallying point for go-to-market execution with work underway to redefine the brand and create a series of security suites.

End to end security covers access from the end users desktop to backend systems. To get there you often go through other networks, the Internet, servers etc. A security breakage can occur at any point. Security is only as strong as your weakest link, that is why we believe it is important to address all aspects of computer security and why IBM is well positioned to be a leader in this area. Because security is so comprehensive and our customers are not security experts we must offer solutions that are understandable, usable and useful .. or they won't use them. Our customers expect IBM to provide leadership technologies to help make them leaders in their field.

Security drives significant revenue and profit for IBM throughout the strategic horizon. Revenue is generated through uniquely identifiable security offerings (direct) and through products whose sale is contingent on other IBM security offerings (indirect). Our strategy provides for this by grouping our offerings by I/T Security Consulting/Services, Technologies and Products and Solutions. Consulting and Services : Our worldwide I/T security consulting practice helps customers determine exactly what their security risks are...and then designs a security program to cover them using proven methodology that incorporates both business and technology requirements. IBM Security Services has the experience and expertise that can dramatically reduce risk and exposure in today's interconnected world. There was a recent announcement in March that provides a series of security services under e-business. Technologies: Technology is key to making e-business real. Many new technologies have been invented to secure e-business and make it safe. Our research labs develop technology that has been awarded the most U.S. patents of any company for five years running with a worldwide portfolio of more than 30,000 patents, 100 of those are in security. Products: Award winning research is only part of the puzzle, however. It is equally important to turn the best of this technology into products and solutions to help our customers compete more effectively in a fast-changing world. IBM has set the pace in this regard, offering the broadest range of security solutions available from any vendor in the industry with continuous focus on simplifying these solutions for our customers use. Unlike many other systems where security is an "add on", security is integrated into the heart of IBM's hardware and software products. Our software features specialized capabilities designed right into our operating systems, and network and database management programs. Other tools include: Global Sign On, LDAP Directory, SmartCards, Firewall, Virtual Private Network technology all part of eNetwork, built-in security features in Lotus Notes and Tivoli management tools making security easy to administer. Solutions: Our security strategy is built on a strong foundation. It begins with security imbedded into our operating systems, hardware, software servers, middleware and clients, so system

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security can't be circumvented. It continues to the next layer of network security addressing administration, delivery and access of information across networked environments. And thirdly our strategy encompasses commerce applications or transactions involving secure credit card transactions, integrating with "middleware" applications and third party software. All three of these layers need to deal with the issues of authentication, data integrity, access control and non-repudiation offering our customer secure solutions. The list is long and impressive. When coupled with IBM I/T security consulting and the range of services provided as part of our SecureWay brand offerings, these tools provide the foundation for securing our customers information systems and networks. Enabling I/T security requires adherence to international standards - - standards reached not just through government imposition, but through global agreement. IBM fully supports the delivery of open standards. We all want to operate in a world in which everybody's software runs on everybody's hardware over everybody's network. Our strategy addresses working with governments around the world to support an unrestricted marketplace for security and encryption products that integrate globally. We provide security technology and contribute intellectual expertise to many standards groups such as Open Group, W3C, ISO and many other national and regional standards bodies around the world. Our strategy is to lead in driving secure Internet-based computing by adopting, developing and promoting standards such as a PKIX reference implementation of the Internet Engineering Task Force (IETF) Public-Key Infrastructure (PKIX) which will promote a standard way to secure any and all applications with digital certificates. We lead the creation of the Key Recovery Alliance whose goal is to expedite the use of strong encryption. And have contributed to many standards such as SET, IPSEC, Open Card, and Gold Standard to mention a few. To manage the corporate security within IBM, a security management system has been put in place. It is a two-pronged approach that combines the customer-driven insights of top division level managers who view security as an important differentiator which will drive more revenue and profit for their offerings with the cross-IBM focus of senior corporate level managers who plan IBM's future. On one side is the Security Management Team (SMT) acts as an Investment Review Board for security, made up of the top executives from our platform, software and services divisions. This group meets quarterly to steer our tactical and strategic security investments as a corporation in order to focus our investments and optimize the security portfolio. On the other side is the CEC level Security Council which meets 3-5 weeks after the SMT meets to review its' recommendations and provide high level guidance. In 1998-1999, the SMT's charter is to maximize the IBM value proposition as it relates to security in order to capture our rightful share of the multi-billion dollar opportunity identified for security (approaching $13.5B by the year 2000), and to ensure that security remains a key differentiator for e-business. The SMT has committed to a contract with the IBM corporation that in return for investment dollars, specific quantifiable results will be realized. It will drive IBM's strategic interests irrespective of local measurement issues, ensure coherent investments across IBM, and promote IBM-wide interests in partnerships, standards, and policy. The Security Council's charter is to review and validate these recommendations in light of future directions the company will be taking and decide how best to prioritize and fund them.

IBM active in making health care effective worldwide

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In the early days of medicine, many healers worked in social vacuums. Hobbled by primitive communications and transportation, they often knew little about disease and treatment beyond the range of their own practices. Today, the world is smaller place, with information shared almost instantly. Unfortunately, medical knowledge and all the data associated with health care -- patient records, tests, prescriptions, billing information and more -- are not easily shared in electronic form.

IBM is working on many fronts to address this fundamental problem of wiring health care into a coherent global information system. Most recently it was awarded part of the contract to develop the National Healthcare Information Network that President Bush first called for in 2004.

“IBM is particularly qualified to lead the global challenge in health care,” said Neil de Crescenzo of IBM Business Consulting Services. ”Health care is a complex web of interdependent technologies and businesses, and IBM has the range of skills and relationships that make us a unique catalyst for the kind of collaborative, societal innovation needed to bring together a more coherent and connected system.”

The need to approach health care on a worldwide basis is obvious. Airplanes can now carry disease across borders in a matter of hours. And widespread concern over an avian influenza pandemic is all too familiar.

IBM’s health care contributions are both regional and global. Regional efforts help new methods to health care become more universal, while global projects knit the world together.

For a regional example, look no further than where the Danish National eHealth Portal, an IBM-built gateway for both patients and physicians, offers a glimpse of what innovations a national health care network in the will bring. The eHealth Portal is the front end to one of the world’s most advanced national health systems, integrating electronic patient records, e-prescriptions, lab results and other features.

A prime example of the global nature of IBM’s work in health care is World Community Grid, which harnesses the idle time of more than 100,000 computers around the globe and applies their collective power to health care research. In only a year, World Community Grid donated more than 18 years of run time to the Human Proteome Folding Project, which determined the size and shape of human proteins. In that time, the grid analyzed more than 95 percent of all human proteins.

Now World Community Grid’s power is to be engaged in the fight against AIDS. FightAIDS@Home is sponsored by The Scripps Research Institute, a private, non-profit research organization. Scripps will use the grid’s computing power to develop new, more robust therapies to counter the evolving drug resistance of the HIV virus, which will help prevent the onset of AIDS in patients.

Results from the Human Proteome Folding project are in the public domain, allowing scientists and researchers to use the information freely in their own studies. Similarly, IBM announced Oct. 24th that it will provide royalty-free access to its patent portfolio for the development and implementation of selected open health care software standards, specifically those built around web services, electronic forms and open document formats. Bringing open standards to health care will help eliminate some of the bottlenecks caused by incompatible document formats and proprietary technology. An open

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standards “healthshare” network would make it easier to find, retrieve and share data such as standardized medical records.

This way to on demand business

Under increasing pressure to boost revenue and respond nimbly to shifting market conditions, companies must become on demand businesses. That's the central premise of a research paper, "Impact of Service Orientation at the Business Level," in the latest issue of IBM Systems Journal. The paper's five authors describe the changes needed to transform a business into an on demand model, including the roles played by "componentization" and "service orientation."

Componentization requires that businesses analyze their differentiating strengths and capabilities and determine which jobs should be done internally and which should be outsourced. Whether internal or outsourced, each capability is considered a component that must interact smoothly with all other components. "Businesses should view themselves as a federation of capabilities that collaborate with other enterprises within a business 'ecosystem,'" the paper recommends.

Once the components have been identified and assigned "homes," a business must assemble them into new "value nets" (as opposed to "value chains"), urge the authors. In the traditional value-chain model, businesses convert raw material into finished goods in production-line fashion, with value added by every step of the production line. In value nets, real-time information moves among cooperating businesses in a dynamic relationship. Business value is created through services provided by participants.

"The key to seamless integration between business components is service orientation," says the paper.

"One of the well-known software engineering principles, 'separation of concerns,' dictates that functional responsibilities be distributed among components with little overlap. In service-oriented business, a similar separation of concerns results in the logical separation of the business function (service) from its fulfillment (implementation)." In other words, the end user, whether a partner, customer or other internal department, doesn't care how the service is delivered, only that it is delivered.

But changing to a service orientation is not without challenges. IT, such as Service-Oriented Modeling and Architecture (SOMA) and Service-Oriented Architecture (SOA) can help. But the authors agree that IT is not the only answer, as businesses must also cope with changing their processes and issues within their organization.

"The parallel evolutions of businesses and IT raise the new challenge of establishing a tighter linkage between business strategy and IT. IBM is actively pursuing ways to bridge this business/IT gap," reports the paper.

IBM reentered India through a JV with the Tatas. However the two spilts in 1990 to chart seprate

path in 1999. IBM has concern on being a solution provider to medium and large business unlike

Compaq and HP who are vigorously chasing the household buyer. In 2003-2004 it had a value share of

7.7% in spite of having a unit share of 4.2% this can be attributed to its high price products. In portables,

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it was the second largest selling brand after Compaq. IBM has a manufactureing base in Pondicherry,

which is intent to use an exportt hub. It has 240 dealer in 48 cities.

Zenith Computers Ltd.

Zenith was marginally behind HCl in the home segment with the unit market share of

9.1% as compare to HCL’s 9.8%. Zenith has always sold on he plaform of price its tag line “MNC

Quality Indian Prices” targets buyer who are price sencetive but are looking for a reliable branded PC.

Thus it is operating in the narrow price band between assemble PC’s and lower-end brand.

Zenith manages to keep its prices low by controling overhead and manufacturing cost and

having a short term purchase plan for components, which gives it more flexibilities and better rates.

HP has an assembling facility in Bangalore with a capacity of to assemble 30,000 PC’s in

a month. It has a retail presence in 60 cities through 135 stores.

The world largest seller of PC’s entered India in 1994. Initially the commercial segment

(largest corporation, Govt., educational, and research Instituteions) was its main target segment. But

with recession in the economy in mid 1990s and the consequent slashing of IT budgets of corporate, it

turned its attention to the home segment. However, it soon realized that its PC’s although perceived well

on reliability and quality, were considered to expensive. The assemblers and Indian brands were

cornering a major chunk of the market.

It slashed prices of its sub brand Presario from Rs.65000 to Rs. 50,000to penetrate into price

conscious India house holds.

At the same IME, Compaq is aggressively going after corporate segment by offering arrange of

products tailored around services to meet specific needs. Its merger with digital equipment further

strengthened its position in the high-end server market.

Wipro:

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Wipro intents to focus more on the lucrative services business in future already services accounts for

more than half of its turn over in contrast the contribution of systems business dropped from 43% to

25% it had a joint venture with Acer for marketing the Wipro Acer the brand of PC’s. However, they

called it off in 1999. Wipro has 500 Strong Dealer Networks it also distributes IBM PC’s and Sun

Microsystems.

CHAPTER 4

DATA ANALYSIS AND ITS INTERPRETATION

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4.1 The competition:

The fact that the company has not only withstood the MNC attack but has actually managed to upstage

them speaks volumes about the effectiveness of the company’s strategies-and this, all the more when

you see the performance of other Indian brands slipping away. A three-pronged approach has helped the

company to keep the MNC attack at bay. For instance, for the home segment, the company has tried to

woo the consumer with multimedia-rich PCs. For the commercial segment, there is the Infinity range

packed with features that any office would require.

The third part of the strategy is to totally focus on Intel servers. HCL works very closely with Intel in

this area, and was the first to offer an Itanium-based server in India. Intel’s game plan is to dominate the

lucrative high-end 64-bit space where the enterprise mullah lies, and HCL has cleverly ensured that it

will get a piece of this action too.

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4.2 Impact of the HP-Compaq merger:

The HP-Compaq merger is one of the greatest factors of concern for the company—for that matter, for

every hardware vendor. This is because of the change in market dynamics thanks to this merger, which

is expected to help HP-Compaq become the next hardware powerhouse. But HCL thinks this

development also has some positive aspects for them.

“Any development has two sides. In this case, the plus side is that there is one competitor less to deal

with. Because of the HP-Compaq merger, today there is only HP and IBM for us to compete with,” says

George Paul, associate vice president, Marketing at HCL Info system. Further substantiating his

statement Paul adds, “We believe one-plus-one is never two in this business. So, this merger will not

have that much of an effect on the Indian hardware industry.”

However, as many analysts have pointed out, the other positive aspect of the merger is that the new

entity has the Compaq brand of PCs and HP printers under one umbrella. However, Paul terms it more

as a ‘logistical advantage’. He says he is confident on this front because of HCL Info system established

presence in the market with countrywide outlets and so many products to serve the Indian market, which

no other player has. “We feel that we will actually gain from this [HP-Compaq] merger,” says a

confident Paul.

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4.3 Customer’s the king :

In a market like India, where customer relationship management is still emerging as a niche segment,

HCL Insys has set examples for others. The company today boasts of being able to retain more than 60

percent of its customers.

To achieve this figure, the company adopted a three-tier approach. The most important strategy as far as

customer satisfaction is concerned, is the technology strategy. Over the years, HCL Insys has ensured

that it came out with latest technologies for Indian customers. Thanks to this philosophy, HCL

simultaneously releases technology in India as and when it is released overseas.

Another strategy that the company uses is ensuring it reaches the customer where he is. Today, HCL has

built a 900-strong partner reseller infrastructure, apart from its 150 retail outlets. These are the two

channels used to reach the customer. Using this structure, the company has direct sales and the

commercial space strategy in place.

The third part of the strategy is the services strategy. Over the years, the company has put in place a

support infrastructure that spreads out across 150 support locations in the country with principal support

engineers stationed at these locations. Services support is also extended through partners. The company

has also set up a number of call centres for the services business. In almost every state in India, HCL

Info system has call centres, and in some of the larger states, there are multiple call centres.

And towards becoming a dominant player in providing global IT services HCL Info system has plans to

further consolidate its hardware and services businesses. It has set up overseas subsidiaries in the US,

the UK, Singapore, Malaysia and Australia.

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CHAPTER 5

CONCLUSIONS

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CONCLUSION:

HCL is a marketing leader in the field of home PCs. It is number one company from last two

year and it hope it will continue in future but to sustain this leader ship company have to improve its

advertising policies. HCL can get much more market share in home PCs by increasing expenditure on

advertising.

Most of the people officials associate HCL with hardware products and vary few know that HCL

also provide IT solutions and software services too. They believe that HCL is typically a hardware firm.

Undoubtedly HCL is leader in after sales services. As well as HCL is a leader in hardware products but

to sustain its leadership and cope up with the intensify competition it has to improve in other field too.

quality and technology are name few. Corporate image is good of HCL as compare to Compaq and

IBM.

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CHAPTER 7

SUGGESTIONS

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SUGGESTIONS:

1. HCL is not giving advertisement of its product frequently in magazines news paper and

Television channels etc. advertising should be frequently to get remembered the name of HCL

by customer.

2. Relationship between the customer and company is the base of growth. Company should

maintain better relationship with its big customer as institutions, corporate, schools, colleges and

end uses also because good relationship is always helpful in growth of sales. Company should

send cards and invitation to the customer time to time or on certain occasion.

3. Most of people know that HCL only deals in desktop PC’s and servers whereas only few knows

that HCL also provides software development, networking, internet services, facility

management and High End solution. So work can be done on it.

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CHAPTER 8

BIBLIOGRAPHY AND APPENDICES

44

IBLIOGRAPHY

REPORTS

Technology Review (India Edition), October 2009 MK Malothra, Marketing research Research Methodology- CR Kothary PITCH(A marketing & media Magazine)

INTERNET

http://www.google.co.in http://www.HCL.com http://www.hp.com

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CHAPTER 8

CHECKLISTS

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Checklist

1.        Is the report properly hard bound/Spiral bound. Yes / No

2.        Is the Cover page in proper format as given in Annexure A? Yes / No

3.        Is the Title page (Inner cover page) in proper format? Yes / No

4.        (a) Is the Certificate from the Supervisor in proper format?

(b) Has it been signed by the Supervisor?

Yes / No

Yes / No

5.        Is the Abstract included in the report properly written within one page?

Have the keywords been specified properly?

Yes / No

6.        Is the title of your report appropriate? The title should be adequately

descriptive, precise and must reflect scope of the actual work done.

Yes / No

7.        Have you included the List of abbreviations / Acronyms? Uncommon

abbreviations / Acronyms should not be used in the title.

Yes / No

8.        Does the Report contain a summary of the literature survey? Yes / No

9.        Does the Table of Contents include page numbers?

(i).            Are the Pages numbered properly?

(ii).           Are the Figures numbered properly? (Figure Numbers and

Figure Titles at the bottom of the figures)

(iii).         Are the Tables numbered properly? (Table Numbers and

Table Titles at the top of the tables)

(iv).         Are the Captions for the Figures and Tables proper?

(v).          Are the Appendices numbered properly?

Yes / No

Yes / No

Yes/No

Yes / No

Yes / No

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10.    Is the conclusion of the Report based on discussion of the work? Yes / No

11.    Are References or Bibliography given at the end of the Report?

Have the References been cited properly inside the text of the Report?

Is the citation of References in proper format?

Yes / No

Yes / No

Yes / No

12.    Have you written your report according to the guidelines? The report

should not be a mere printout of a Power Point Presentation. Source

code need not be included in the report.

Yes / No

13.    A Compact Disk (CD) containing the softcopy of the Final Report and

a copy of the Final Seminar Presentation made to the Supervisor /

Examiner (both preferably in PDF format only) has been placed in a

protective jacket securely fastened to the inner back cover of the Final

Report. Please write your name and Roll No with a marker on the CD

as well as the CD Jacket.

Yes / No

Declaration by Student:

I cer t i fy tha t I have proper ly ver i f ied a l l the i tems in th is checkl is t and

ensure tha t the repor t i s in proper format as speci f ied in the course

handout .

Signature of the Student ---------------------------------------------------------