 ‘There’s a shift to application-driven environments and social communities’
D-Link wants to take its motto, ‘Building networks for people’ a step further by enabling the entire application through social networking portals and localized services. In an exclusive interaction with Network Computing, Tony Tsao, CEO & President, D-Link Corporation tells Brian Pereira how D-Link plans to achieve this new vision
How do you view the Indian market? What investments are you making in India?
We have been very successful in the BRIC countries, particularly Russia (18 – 20 percent of worldwide revenue) and Brazil (10 percent). We want to grow as much in India in the next five years. We have been here for more than 10 years and will invest heavily in India, in the three years.
We do not provide just a product. Our strength is in providing the full solution which includes service and support. That gives us an advantage in this mega market. The revenue will come once the end user sees we are a serious player. We came to India in 1999 and did USD 1 million in business. Three years later we grew to USD 25 – 30 million and five years later we did USD 70 million.
We changed our business model after a couple of years, since the Indian environment changed. Enterprises began to look for affordable solutions and we saw opportunities there. That’s why we expanded and have 17 offices and a big team here. Our teams in India are involved in ERP, logistics and other such activities.
D-Link India invested heavily in a new ERP system that’s linked to the global system. We next want to invest in infrastructure. D-Link has also invested in training and customer awareness programs (seminars). We have done R&D on the product side but we will invest more on the application side.
How do you see the market opportunity in the future?
From a product point of view, networking is just a device; it is the connectivity part of the infrastructure. Looking ahead, networking will be at the center of a connected world of devices that include PCs, IP cameras, NAS devices etc. Connectivity will be enabled through Wi-Fi and 3G. So you will not talk about routers and switches. Rather, we will hear about the digital car, the digital school, smart hospitals, e-learning, (technology that aids) caring for the aged. The market will shift to application-driven (environments) and to communities that are driven by social networks. In the future, mobile will integrate with social networks.
Having been in the industry for more than 22 years, we know how to deploy and manage networks but we also think it is important to consider the local ecosystem. And that’s where we will direct our R&D investment.
Which verticals are you focusing on in India?
We partner with telecom companies and sell our products through them to the enterprise and the consumer. We are more of an alliance partner than a supplier. We are interested in the education sector too and have a solution for it. We also have a full range of solutions for the government. We are focusing on the hospitality sector and offer hotspot solutions for it. The railway station may want to put in a hotspot. We also have solutions for remote connectivity and for long-distance connectivity. IP Surveillance is another differentiator for us.
What’s your strategy to reach out to the young consumer? How will you exude the coolness factor like Apple?
Every year we ship around 10 million routers worldwide. And the traffic passes through our routers to other devices. We want to make our products more appealing through design, function and choice of aesthetics. D-Link is building community portals through alliances with Yahoo and others. The portal will integrate with the consumer products. We are also introducing products for different age groups.
Some examples of our Home automation products include the Boxee Box, IP set top box and media players.
You also aspire to be a major player in the enterprise space. How will D-Link position itself against established players?
Consider the needs of an enterprise customer such as a big bank or a major organization like the Indian Railways. In the past they would talk about products and infrastructure. But now these customers talk in terms of business processes—the bank talks about updating its service policies, for instance. To do that they need to have a lot of training and for this they require communications infrastructure. It’s really about addressing application-driven requirements. We will position ourselves as an application service provider in the enterprise space.
What’s the strategy for Phase-2 of D-Link Green Ethernet?
Our green products have increased our revenue. But we are highly focused on energy savings and on protecting the environment. D-Link Green Ethernet products conform to standards like WEEE. In Phase-1 we green-enabled the 8-port switches. Now our Green Ethernet technology is percolating down to other products such as the IP camera, NAS boxes and wireless home routers.
What’s the new vision for D-Link in 2010?
You will see more application-driven products from D-Link. We also want to have more alliances in the industry, because we want to offer the network as a pervasive solution (in the home). For instance, if you have IP surveillance at home, you will need an application on the iPhone to view the camera feed. This will happen through alliances. Eventually, we want to generate some service revenue through community portals.
These will be both B2C and B2B services. For this, we will work with local companies to generate applications that are localized. D-Link will be more than a product company—eventually, we will provide a platform for these localized community-driven applications. The product vendors (both consumer electronics and IT vendors) can use our platform to provide solutions. The platform will offer a total solution, including network management. We can generate revenue through online advertisements on the portals. We will offer a revenue sharing model with the social networking companies.
What’s your motivation line to your employees?
We create an environment and then encourage people to contribute their talent and exercise their dream. We encourage people to have a spirit of entrepreneurship—without this, you won’t have the spirit to make it happen. We have systems in place to help our employees achieve all this.
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