“Once you go to 40 gigs you might as well go to fiber because it’s an easy migration path up to a 100 gigs”

Stephen C Mitchell, Senior Vice President & General Manager, Enterprise Networks Division – TE Connectivity & KK Shetty, Director, TE Enterprise and Telecom Networks, India and SAARC talked to Prashant L Rao about trends in connectivity and TE’s strategy

Tell us about the areas that TE Connectivity addresses.
Mitchell: Our addressable market is a $6 bn market globally and we are the runner up but we are closing the gap quickly. If you think about any connection to a computer in the data center as well as all the apparatus, we provide that.

Are data centers at 10g or are they moving to 40g?
Mitchell: The real discussion is where copper stops and fiber takes over. There is a lot of talk about 40 gig copper but our feeling is that, once you go to 40 gigs, you might as well go to fiber because it’s an easy migration path up to a 100 gigs. All you have to do is change the electronics on the side and not the cabling in the middle.

How is the market for connectivity products doing?
Mitchell: We are seeing that the LAN market has slowed down a bit as commercial construction is a bit slower. The data center business is growing in double digits and that’s going to go on for a long time.

Even in the LAN business, where it’s relatively flat, the markets that demand speed and things like that are continuing to invest.

Are companies going for 1g or 10g to the desktop?
Mitchell: If you go back ten years, people would put in an infrastructure that needed to be changed out every 6-8 years from a technological perspective. Now, you can go to a gig or 10 gigs and that technology will last you longer. Some companies are going to 10g on the LAN. In the data center, it is going further and moving to fiber. It also depends on what’s being connected on the ends.

It makes more sense to invest in higher bandwidths today even if the switching gear and servers are at 10 gigs since redoing a data center involves pulling a lot of cable out. Companies tend to leave the copper intact and overlay the fiber. We offer both copper and fiber. In India, a lot of the specifications come out of the US. Indian data centers are about 50% copper and 50% fiber.

Is there a green aspect to cabling?
Mitchell: OPEX around power is one of the biggest costs in a data center. By providing smaller cables and fewer connections we create better airflow and our customers are able to cut down on the use of air conditioning.

Is Cat7 in demand?
Mitchell: Cat7 is here but the question becomes do you go from 6a and take fiber right to the desk? Cat7 hasn’t taken off. If you look at the last 10-20 years it has been a transition from Cat5 to 5e and from Cat6 to 6a; 6a is really taking off.

How does managed connectivity help?
Mitchell: It’s about remote management, knowing when a connection comes out, what’s it connected to, how many times was it disconnected, who plugged it in etc. We have the ability to know how long a cable is, where it was made etc. If you replace a patch cord with one that’s longer and there’s degradation in the signal then you will know the reason for that.

You have solutions for enhancing cell coverage. What’s happening in that area?
Mitchell: Our DAS solution gives you better coverage within buildings. It extends the signal at sporting venues etc. Originally, they were for coverage but now it’s more from a capacity standpoint. If you are at a sporting event or a conference, it’s about capacity as well as coverage. A lot of the carriers are using it and a lot of enterprises are buying it directly.

Shetty: Delhi International Airport has deployed this solution and Mumbai International Airport is in the process of deploying it.

Do you play in Wi-Fi?
Mitchell: Wi-Fi only hasn’t worked out. You are not getting the signal and people are worried about security. The verticals that we play in are at the higher end of the market. You won’t see a bank replace its LAN with a Wi-Fi network. Wi-Fi is an overlay to the LAN. If you have three connections to a desk, the third might be Wi-Fi.

Going forward, what’s your strategy going to be?
Mitchell: We are in the connector business, whether its automotive or network solutions. We will continue to strengthen that. It’s about technology; not about buying share. It’s about profit and delivering more services to the customer.

Is intelligence built into all your cabling solutions or is it optional?
Mitchell: Intelligence in cabling is optional. The attach rate’s about 10% today. All of our competitors had a solution but it didn’t really deliver all the things that people wanted. With the addition of ADC, we brought in a new technology that delivers the next level of intelligence. It’s about the software and not the cabling. We have an open architecture. Whether it is Emerson or IBM Tivoli, you will be able to look into a full system that will be managing a data center and you can get down to layer 1. We have an open API that you can plug alarms etc into it from the building management side. That’s going to change the business.

Shetty: It brings a lot of value to the end customers or SIs.

Mitchell: It makes us more valuable to our SIs because there’s a revenue stream for them in integrating this product. SIs go through a certification program as we are responsible in the end.

Is India a market or more of a development hub for TE?
Mitchell: India is one of our biggest markets. There’s a very big market for the enterprise business as well as great opportunities across TE. We look at India as a self contained market not just some place where we make products and ship it out. We have gotten to where we have 35-40% market share and we are looking to grow that business. We have also been doing a lot of work with global accounts.

Shetty: For SEZs and the like, we will offer turnkey solutions that include enterprise, data center and telecom solutions along with DAS. Our SI can be a single point of contact for such deployments. At the top end, where the entire project selling is required, we have the big names like IBM, HP, Wipro & HCL etc. They offer turnkey solutions and our solutions are part of that. Then we have 160 SI partners across India who focus on mid- and higher-end projects. Lastly, there are the regional distributors and distributors who focus on the run rate business.

Mitchell: TE is not a holding company. These are businesses that work together and present a single face to the customer. We continue to add, through acquisitions and R&D, to provide greater value to our customers and integrators.

Shetty: We have training centers in Bangalore, Mumbai & Delhi and are setting up one in Hyderabad. We have trained over 2,500 SI partners and we add 200-300 people to that every year. We have implemented a lot of technologies for the first time in India.

Mitchell: We create an environment where people want to come to TE.