CRN India recently conducted an exclusive interview with Marthesh Nagendra, Sales Director for India, MEA, and South-East Asia Region at NETGEAR. In this interview, Nagendra shares insights into NETGEAR’s strategic positioning in India’s rapidly evolving market landscape, emphasising the company’s growth trajectory, channel strategies, and future directions for its partners
How is India placed in NETGEAR’s global strategy and how is it an important performance market for the organisation globally?
Absolutely, India stands as one of the fastest-growing economies globally, a fact widely acknowledged. The country’s consumption rates are soaring, fueled by its unique demographic advantage – a staggering 50% of the population is under the age of 28, embodying a spirit of hustle and drive. India has rightfully earned its title as the startup capital of the world, with entrepreneurial ventures sprouting everywhere and consumption trends on the rise.
Without a doubt, NETGEAR India is leading the charge as the fastest-growing country across our network. Over the past four years, our growth trajectory has been remarkable, consistently surpassing the 20% year-over-year mark. Across all our product verticals, we’re witnessing robust performance.
Our Point of Sale (POS) solutions tailored for surveillance purposes are thriving, catering to evolving security needs. Meanwhile, our professional WiFi access points designed for both indoor and outdoor settings, particularly in campus environments, are experiencing exponential growth. Each quarter, we’re proud to deploy our solutions in numerous universities, facilitating seamless connectivity.
Our professional Audio-Visual (AV) segment is experiencing phenomenal growth, with our business doubling in size annually over the past four years. We’re continually innovating and introducing exciting new products across all verticals. For instance, in the Power over Ethernet (PoE) domain, we’re launching a new series of switches equipped with gigabit and 10-gig capabilities, alongside the latest multi-gig managed PoE switches, offering a diverse range of options.
Our lineup of access points is equally comprehensive, boasting the recent introduction of Wi-Fi 7 technology. Whether it’s standalone or cloud-managed access points, we offer a complete suite of solutions tailored especially for sectors like hospitality, education, healthcare, and more, where our products are gaining significant traction.
In professional AV, our products stand out as tried, tested, and certified by over 260 different Original Equipment Manufacturers (OEMs). With plug-and-play simplicity and preset profiles tailored for easy configuration, NETGEAR switches have become the preferred choice for AV integrators worldwide, simplifying setup processes across various OEM platforms.
How has been the growth of your channel business in recent times?
Our business operates exclusively through channels in India, unlike European and US markets where online sales are prevalent alongside channel distribution. Our approach focuses on strengthening existing channel partnerships rather than expanding to numerous new ones. This strategy is reflected in our consistent year-over-year growth of individual channel partners, averaging over 20%.
Unlike many other vendors who continuously expand their channel network through trial and error, we maintain a more focused approach, adding no more than 10% additional channel partners each year. Our emphasis lies in cultivating strong, aligned relationships with our existing partners, ensuring they are well-versed in our work culture and committed to meeting revenue targets.
This mutual understanding and alignment between us and our channel partners are crucial for both parties’ success, driving our concerted efforts towards sustained growth and performance.
Do you have any particular training program or incentives in place for your channel partners?
Yes, we offer a range of training programs, many of which are certification-based. You can access these programs through our website, Academy.Netgear.com. Here, you’ll find training modules covering our entire product range, from PoE switches to access points and ProEV. Our training curriculum includes multiple modules tailored to different products and solutions. Additionally, we provide training on our cloud-managed offerings for Pro WiFi and switches, offering valuable insights to users.
Are you encouraging your channel partners to adopt AI in their operations, considering its importance in the current market landscape?
Absolutely. AI represents the device’s ability to self-configure seamlessly. For instance, when you connect various encoders, audio and video devices, or NDI cameras to our system, the switch automatically identifies each component and applies the necessary configuration and interface settings. This ensures a flawless setup process, where everything falls into place automatically. While this has been our standard practice for years, it’s now being recognised as artificial intelligence.
Across all our products, we’ve integrated artificial intelligence capabilities, making them preferred choices for end-users and channel partners alike. Our products stand out for their ease of setup, low total cost of ownership, extended warranties, and minimal return rates. In fact, our switches boast an impressive track record, with only one return for every thousand units sold. These capabilities are inherent in our products.
Moving forward, we’ll continue leveraging these capabilities and perhaps introduce new marketing terminology to align with the current AI trends in the market. Essentially, it’s about rebranding these existing features under the umbrella of AI.
How do you see the role of partners evolving in this digital disruption era?
Partners hold significant importance for us as we operate as a networking company. When it comes to any solution, the end user typically requires a diverse array of products. For instance, in a surveillance solution, they may need a camera, cable, and a PoE switch, which NETGEAR provides. While we offer just the switch, our partners play a crucial role in instilling confidence in our products. This confidence is built through a substantial number of installations and positive end user feedback. As our relationship with partners strengthens, they become instrumental in closing deals, and we ensure fair margins without over or under distributing our products.
To prevent territorial conflicts, we meticulously demarcate specific areas for our partners. Unlike other brands where partners from different regions may procure products from distant locations, we maintain clear boundaries. Our market is effectively demarcated, with account managers stationed in over 22 cities across India to oversee these relationships. Their role is to ensure that end users, like those in Coimbatore, source their products exclusively from local partners rather than from other regions like Mumbai or Delhi. This approach builds confidence among our partners, which has been a key aspect of our value proposition for several years.
How has NETGEAR’s business growth been in India and globally?
Speaking about NETGEAR, I oversee our commercial business segment. Over the past five years, our commercial business has seen consistent growth, surpassing 20% year-over-year. This sustained growth trend is a noteworthy achievement for us. As a globally recognised brand listed on NASDAQ, our financial results are readily accessible online. Currently, our global growth rate hovers around 8% to 10% year-over-year. In terms of contribution to our global earnings, the commercial segment, including our operations in India, accounts for approximately 7% to 8%. Particularly focusing on our business in India, we’ve been experiencing robust growth, averaging around 20% year-over-year. This highlights the strength and potential of our operations in the region.
Taking learning from the unprecedented times, what are the top channel directions NETGEAR has set for its partners in 2024 & beyond?
Our approach is highly systematic. We conduct yearly partner programs across India, structured into distinct tiers: Ambassador, Titanium, Platinum, Gold, and Silver. Each tier comes with specific targets and benefits.
For our Ambassador Partners, we offer additional revenue programs, increased rebates, diverse training options, and exclusive events where they can showcase our products to their customers with the support of our trainers.
We prioritise inventory levels for our tier-level partners, such as Gold and Platinum Partners, offering them higher discount levels and dedicated account managers to oversee their accounts. Moreover, we provide comprehensive training programs for their channel partners and align their branding strategies with ours to enhance visibility and engagement.
These programs are ongoing throughout the year, complemented by quarterly targets tailored to each partner’s objectives, including revenue targets, rebate programs, and even incentive trips. We are committed to supporting our partners at every step, ensuring mutual success through collaborative efforts and strategic initiatives.
Which are the areas where your partners should invest to be aligned with these directions?
Nowadays, the landscape of profit in the tech industry has shifted. Gone are the days when substantial margins could be earned simply by selling hardware components like motherboards. With the decline in assemble PC sales and the rise of e-commerce platforms, price transparency has become the norm. Margins have dwindled to around 2% for items like laptops, making it clear that the real revenue lies in offering comprehensive solutions.
Partners now need to redirect their investments towards essential areas such as pre-sales efforts, solution design, and solution implementation. Investing in SEO, digital marketing, lead generation, and engagement activities is crucial for scaling up revenues, maintaining healthy bottom lines, and fostering stronger relationships with vendors. Moreover, providing solutions to customers opens doors to additional revenue streams, such as annual maintenance contracts (AMCs) and licence sales.
Unlike the sporadic windfalls seen during events like the hard drive shortages caused by natural disasters, sustainable business growth now hinges on offering value-added solutions rather than mere box-selling. By focusing on building robust pre-sales and implementation capabilities, partners can position themselves to thrive in today’s competitive market and generate consistent, substantial profits.
