SMBs are a growing market for vendors in the server space. Innovation is what will help them sustain their position in the market
According to an IDC report, the overall revenue of the server market touched $727 million in 2007 recording a 24 percent increase over 2006. A recent joint study conducted by IDC and AMI Partners reflected that there are 1.9 million SMBs and 30,000 mid-market entities in India. Also, as per analyst estimates, SMBs in India will spend up to $8 billion to beef up IT infrastructure, to a robust 24 percent from last year.
The changing trends
Emerging market trends and the surging need for energy efficient data centers and virtualization are the prime factors that have been propelling the server industry in the country. The increasing number of servers accelerates the heat generation and thereby raises the issue of cost efficiency. India being a growing economy, a lot of progress is happening here in the areas of building infrastructure, government initiatives and retail revolution. All the growth factors clubbed with the necessity to build up anenergy- efficient and cost saving IT implementation is driving the server industry on a large scale.
Vendors are making all efforts to harness maximum profitability out of the emerging trends and are coming up with servers that yield better performance and are easy to manage.
Speaking on the availability of energy efficient servers, Mukul Mathur, Director-Channels and Marketing, IBM India/South Asia said, "With our System x and System p servers, we can help cut costs, increase performance and help control power usage. And, by consolidating and virtualizing on IBM System x and BladeCenter servers, customers can increase the utilization of their hardware and decrease the number of physical assets they need to watch over. This translates into real savings through better energy conservation and IT resource usage across the data center."
Non-traditional vertical
Telecom, BFSI and manufacturing have been the traditional drivers of servers in Indian market. However, the year 2007 saw retail and construction as the emerging verticals. In addition to that vendors are observing growth in the adoption of server technology in government, media and entertainment industries. Specific industry segments including education, retail and banking are witnessing a constant demand for servers that undertake specific applications for print, e-mail, etc that ensure that a downtime in one doesn't affect entire system.
"Even the government sector is now posing as a major contributor for the server market in the country. With the increasing number of schools, computerization happening at different scales and e-gov projects coming up at large scale, the entire server sector is seeing a boost. IT and ITeS are the other sectors that contribute to the growth of server industry. The next huge demand is coming from construction and real estate business," says Ashish of Sun Microsystems.
Virtualization ahead
The reasons blade servers are doing better business in the market is because they perform better than the traditional servers and it optimizes space utilization for data centers besides being energy efficient. With power cooling becoming the most talked about technology, blade servers have been able to create a better market in the server segment. Virtualization still comprises a small market share but the server players agree that this is the next big thing happening in the server domain. Virtualized servers have the capacity to increase utilization of a server by 20 to 25 percent and observing the non-utilization of energy by traditional servers and increasing computing across all the verticals, they promise profitable business.
Commenting on the adoption rate of virtualized server, George Paul, EVP-Marketing, HCL Infosystems said that it was slow till key OS vendors announced virtualization support as a standard feature, this has led to the increased propagation of virtualization to a larger segment of the market. Indian players understand the efficiency that virtualization can bring to their organizations and the adoption rate signifies the maturity level at customer's end.
The main factors that drive the virtualization segment is the infrastructure flexibility and lower costs. It enables the organizations to run multiple applications and workloads on single systems safely-radically increasing efficiency and utilization rates while lowering overall costs.
Challenges at SMB front
With the increasing adoption of ERP and other business applications, small and medium businesses (SMBs) have emerged as the key focus area for the server domain. However, in the SMB environment, complexity of IT is a matter of concern, and procuring, deploying, managing and cost implications prevent enterprises to deliberate on decisions.
Managing energy in the data center is a growing concern across companies of all sizes in India. "SMB is a major market but it has its own limitations. Lack of quality manpower in SMB space to manage the IT infrastructure is an issue and therefore, the vendors have to simplify IT to an extent that it is managed easily by the available resources," said Pallab Talukar, Director, Enterprise Solutions Group, Dell India.
SMBs today are looking for customized solutions and products that cater to their unique IT requirements. This has led to an increase in the IT spending among SMBs. Kathuria from Microsoft said that keeping their requirements in mind, Microsoft is looking forward to announce the launch of Small Business Server 2008 and Essential Business Server 2008 later this year, which have been specifically designed for SMB customers with built-in virtualization capabilities.
Vendors need to focus on continuous learning and training programs for their partners to enable them to provide the desired consultancy to the business organizations.
Source : CIOL
Thursday, September 25, 2008
DoT allows resale of IPLC service
In a bid to increase availability of bandwidth for the fast-growing small and medium enterprises (SME) segment, the Department of Telecommunications (DoT) today permitted the resale of International Private Leased Circuits (IPLC).
To boost competition and affordability in the IPLC segment, the DoT has created a new category of licence called “Resale of IPLC Service” that will be permitted to enter into agreements for leased line with access providers, national long distance service providers and international long distance service providers for provision of IPLC to end customers.
Industries like business process outsourcing units, software exporters, call centres and banks are likely to benefit most from this step, given their heavy usage and dependence on leased line services.
According to the norms laid down by the DoT, only Indian registered companies are permitted to apply. The net worth and paid-up capital of company is required to be a minimum of Rs 2.5 crore. It should also be compliant with the current foreign direct investment (FDI) norms where the foreign equity in the paid-up capital of the company must not exceed 74 per cent.
The applicant should have an initial financial bank guarantee of Rs 1 crore. The entry fee has been set at Rs 1 crore, while the annual licence fee shall be 6 per cent of the adjusted gross revenue (AGR), or Rs 5 lakh, whichever is higher.
Source : Business Standard
Wednesday, September 24, 2008
Top 5 Ways To Generate Low Cost Website Traffic
There is one hard and fast rule in generating income for your website: A steady flow of website traffic. If no one goes to your site, it hardly bares a chance of generating an income. Many sites have tried and failed in doing so, and these results to the sites demise. It takes money to maintain an income generating site; it also takes money to make money.
BUT, it doesn’t take a whole caboodle of cash to generate website traffic for your site.
Ever wonder how does big hit sites drive traffic top their site? Most of them are spending tons of money to drive the traffic to their sites, investing in many advertising campaigns and different forms of marketing schemes and gimmickries. This is all worthwhile because, well, they are what they are now, high earning, big hitting websites.
You don’t have to do this if you don’t really have their resources. There are many ways to generate low cost website traffic without having to spend what you don’t have or can’t afford. Many people have banked on high cost methods and have ended up losing their shirt over it.
Here I present to you the Top five ways to generate low cost website traffic that could help your site a whole lot. Even if you only get a small percentage of successful visitors in to client ratio it still works especially if you get a high number of website traffic.
Exchange Links
This is a sure and proven method. Rarely would you see a site where there is no link to another site. Many webmasters are willing to exchange links with one another so that they could produce more public awareness about their sites. You’ll soon see and feel the sudden upsurge of the traffic coming in to your site from other sites.
A major prerequisite in exchanging links with other sites is having the same niche or content as the other site. They should share a common subject so that there is continuity in the providing of service and information to what interests your target traffic.
Exchanging links also boosts your chances of getting a high ranking in search engine results. It is common knowledge that search engines ranks high sites that have inbound and outbound theme-related links. With a good ranking position in the search engines, you will generate more traffic in your website without the high costs.
Traffic Exchange
This is like exchanging links but on a different higher level. This may cost a bit more than exchanging or trading links but could be made cheaper because you get to earn credits. You can use those credits when viewing others traffic, while you earn credits when someone views yours.
Traffic exchange services are the viewing of another’s site or page. This is done vice versa where a site can use your sites contents and so can you to his or her site. You both benefit from each others efforts to generate traffic. The other sites visitors can go to your pages and know more about your site as well as theirs. Once again the public awareness of your sites existence is boosted.
Write and Submit Articles
There are many e-zines and online encyclopedias in the internet which provides free space for articles to be submitted. If you want to save costs, you can do the articles yourself. There are many freelance writers who are willing to write for you for a small fee, but to save money, it is wise to do those articles yourself.
Write news articles or marketing news articles that are themed along with the niche of your site. Write something that you have expertise on so that when they read it, they can feel your knowledge about the subject and will be eager to go to your site. Write articles that produce tips and guidelines to the subject or niche your site has.
Include a resource box at the end of your article that can link them to your site. Write a little about yourself and your site. If you provide a light, information-laden and interesting article, they will go to your site for more.
Make a Newsletter.
This may sound like hard work because of all the articles you may need to use to build a newsletter but on the contrary, this is not so. There are many writers and sites that are willing to provide free articles as long as they can get their name in on your newsletter. This will also provide free advertising for them as well.
As your newsletter gets pass around, you can widen your public awareness and build an opt-in list that can regularly visit your site.
Join Online Communities and Forums
This only requires your time and nothing else. You can share your knowledge and expertise with many online communities as well as your website. You can get free advertising when you go to forums that have the same subject or niche with your site.
Share your small amount of money and let them see how knowledgeable you are with the subject. As you build your reputation, you also build the reputation of your site, making it a reputable and honest business that could be frequented and trusted by many people.
Source : The Works-Small Business Hub
BUT, it doesn’t take a whole caboodle of cash to generate website traffic for your site.
Ever wonder how does big hit sites drive traffic top their site? Most of them are spending tons of money to drive the traffic to their sites, investing in many advertising campaigns and different forms of marketing schemes and gimmickries. This is all worthwhile because, well, they are what they are now, high earning, big hitting websites.
You don’t have to do this if you don’t really have their resources. There are many ways to generate low cost website traffic without having to spend what you don’t have or can’t afford. Many people have banked on high cost methods and have ended up losing their shirt over it.
Here I present to you the Top five ways to generate low cost website traffic that could help your site a whole lot. Even if you only get a small percentage of successful visitors in to client ratio it still works especially if you get a high number of website traffic.
Exchange Links
This is a sure and proven method. Rarely would you see a site where there is no link to another site. Many webmasters are willing to exchange links with one another so that they could produce more public awareness about their sites. You’ll soon see and feel the sudden upsurge of the traffic coming in to your site from other sites.
A major prerequisite in exchanging links with other sites is having the same niche or content as the other site. They should share a common subject so that there is continuity in the providing of service and information to what interests your target traffic.
Exchanging links also boosts your chances of getting a high ranking in search engine results. It is common knowledge that search engines ranks high sites that have inbound and outbound theme-related links. With a good ranking position in the search engines, you will generate more traffic in your website without the high costs.
Traffic Exchange
This is like exchanging links but on a different higher level. This may cost a bit more than exchanging or trading links but could be made cheaper because you get to earn credits. You can use those credits when viewing others traffic, while you earn credits when someone views yours.
Traffic exchange services are the viewing of another’s site or page. This is done vice versa where a site can use your sites contents and so can you to his or her site. You both benefit from each others efforts to generate traffic. The other sites visitors can go to your pages and know more about your site as well as theirs. Once again the public awareness of your sites existence is boosted.
Write and Submit Articles
There are many e-zines and online encyclopedias in the internet which provides free space for articles to be submitted. If you want to save costs, you can do the articles yourself. There are many freelance writers who are willing to write for you for a small fee, but to save money, it is wise to do those articles yourself.
Write news articles or marketing news articles that are themed along with the niche of your site. Write something that you have expertise on so that when they read it, they can feel your knowledge about the subject and will be eager to go to your site. Write articles that produce tips and guidelines to the subject or niche your site has.
Include a resource box at the end of your article that can link them to your site. Write a little about yourself and your site. If you provide a light, information-laden and interesting article, they will go to your site for more.
Make a Newsletter.
This may sound like hard work because of all the articles you may need to use to build a newsletter but on the contrary, this is not so. There are many writers and sites that are willing to provide free articles as long as they can get their name in on your newsletter. This will also provide free advertising for them as well.
As your newsletter gets pass around, you can widen your public awareness and build an opt-in list that can regularly visit your site.
Join Online Communities and Forums
This only requires your time and nothing else. You can share your knowledge and expertise with many online communities as well as your website. You can get free advertising when you go to forums that have the same subject or niche with your site.
Share your small amount of money and let them see how knowledgeable you are with the subject. As you build your reputation, you also build the reputation of your site, making it a reputable and honest business that could be frequented and trusted by many people.
Source : The Works-Small Business Hub
How to retain customers
Businesses, now more than ever, need to harness the attention and loyalty of customers. Customer retention rates are decreasing as people are more inclined to shop around for the best deals. Subsequently, SMEs are advised to ensure their delivery of service is second to none.
The potential revenue stream from existing customers can be enough to keep businesses afloat during difficult times. The actions of a business best articulate it’s objectives and how it values it’s customers. Without a consistent and thorough customer service policy, customers are likely to paint a very unfavourable picture of the business.
There are 5 key areas to address in designing a customer retention strategy. These include:
1. Address customer complaints:
Companies often fall down in the speed and way in which they address customer complaints. Dissatisfaction may derive from customers feeling they are not getting the best deal; they may be unhappy with the length of time goods are delivered; or the speed at which enquiries are answered. These scenarios can lead to a reactive situation which is bad for business identity, brand, and reputation.
Research can help avoid them: implementing and maintaining a customer database, including information such as how often they purchase or use the business service(s) will identify customers who are losing interest in your company, and allow you to make timely communication with them.
2. Communication
Typically, customers want good communication and action from a company to resolve problems, so communication is crucial to retaining existing customers.
Also, it is essential to keep customers informed of new or developing products or services on offer, as well as all forthcoming events/stock etc. Reminding customers of why they selected your company above the competition in the first place encourages advocacy and spend. A measured approach to customer communication can be low cost and extremely effective.
3. Value in Employee Experience
Employees with direct contact with customers have a valuable contribution to make when understanding customer behaviour. They will recognise trends, consumer patterns, potential failings and solutions. Regular meetings with front-line staff provide an opportunity to update strategies and identify areas for improvement.
4. Establish a firm relationship with customers
Not only does this improve their level of loyalty and make it more difficult for them to defect; it also makes it easier for any problems to be resolved without the burden of a reactive situation.
5. Honesty
Trading with honesty and fairness will always attract customers. The fear of fraud, and unfair treatment amongst consumers now puts company traits of honesty and fairness (as well as quality and value) at the forefront of how people select which company to do business with.
Source : The Works : Small Business Hub
The potential revenue stream from existing customers can be enough to keep businesses afloat during difficult times. The actions of a business best articulate it’s objectives and how it values it’s customers. Without a consistent and thorough customer service policy, customers are likely to paint a very unfavourable picture of the business.
There are 5 key areas to address in designing a customer retention strategy. These include:
1. Address customer complaints:
Companies often fall down in the speed and way in which they address customer complaints. Dissatisfaction may derive from customers feeling they are not getting the best deal; they may be unhappy with the length of time goods are delivered; or the speed at which enquiries are answered. These scenarios can lead to a reactive situation which is bad for business identity, brand, and reputation.
Research can help avoid them: implementing and maintaining a customer database, including information such as how often they purchase or use the business service(s) will identify customers who are losing interest in your company, and allow you to make timely communication with them.
2. Communication
Typically, customers want good communication and action from a company to resolve problems, so communication is crucial to retaining existing customers.
Also, it is essential to keep customers informed of new or developing products or services on offer, as well as all forthcoming events/stock etc. Reminding customers of why they selected your company above the competition in the first place encourages advocacy and spend. A measured approach to customer communication can be low cost and extremely effective.
3. Value in Employee Experience
Employees with direct contact with customers have a valuable contribution to make when understanding customer behaviour. They will recognise trends, consumer patterns, potential failings and solutions. Regular meetings with front-line staff provide an opportunity to update strategies and identify areas for improvement.
4. Establish a firm relationship with customers
Not only does this improve their level of loyalty and make it more difficult for them to defect; it also makes it easier for any problems to be resolved without the burden of a reactive situation.
5. Honesty
Trading with honesty and fairness will always attract customers. The fear of fraud, and unfair treatment amongst consumers now puts company traits of honesty and fairness (as well as quality and value) at the forefront of how people select which company to do business with.
Source : The Works : Small Business Hub
Tuesday, September 23, 2008
SME storage demand to skyrocket in 2009-10
SMEs in India are heading towards a data deluge within a year’s time between now and 2009-10A Nielsen-Netapp study
NetApp, leading provider of innovative data management solutions, today announced the interim findings of its ongoing survey titled 'Data Explosion in India - Trends & Challenges' in partnership with The Nielsen Company.
SMEs in India are heading towards a data deluge within a year's time between now and 2009-10. According to the survey, there is a clear indication of rapid increase in storage requirements in the SME segment. There will be a 56 percent growth in SMEs whose data storage requirements will jump to the 500-999 GB range from the 100-499 GB range.
Further, there will be a 133 percent growth in SMEs whose data storage requirements will increase in the 6-10 TB range. This shift in increase in storage requirements is also reflected by a corresponding drop by 29 percent of SMEs between 100-499 GB range and a 60 percent drop in the >100 GB range.
In addition, there is expected to be a 33 percent growth in SMEs demanding storage in the 11-15 TB, and >25 TB ranges respectively, which is a huge data management challenge coming up for SMEs.
NetApp launches storage solutions for SME marketOwing to the huge potential in the Indian SME market, NetApp also announced the complete integration of the S Family of storage solutions, formerly known as StoreVault, into its full line of storage and data management solutions for the midsized segment at an entry-level price.
The S550, with 12TB, caters to small businesses with 100 to 500 employees while the FAS 2020, with 68 TB, fits mid-sized business with 250 to 750 employees.
"The report findings clearly indicate that the SME market in India is growing rapidly, which is reflecting in their data storage requirements. The integration of the S family into NetApp's full line of storage and data management solutions has happened at the most appropriate time for us considering the robust growth in the SME segment. The S Family will offer SMEs in India a new world of solutions especially designed for their evolving needs," said Surajit Sen, director, Channel, Alliances & Market, NetApp India.
"The survey revealed that data management was a genuine concern of SMEs. Hence our storage technology would help all the data management concerns of Indian SMBs," he said. "24/7 access is critical for SMEs."
NetApp's S Family of storage solutions finds demand among micro verticals including the telco segment, that offer value added services like ring tones and gaming to customers, says Sen. "This technology is a natural fit to Telcos, smaller banks, small manufacturing, healthcare and auto ancillary organizations."
The S Family products gets integrated with other solutions - in all, acts as a bundled solution including data back-up and data de-duplication. To start with, NetApp will be targeting Class B and Class cities in the south like Cochin, Salem, Coimbatore, Vijayawada and others before moving on to eastern, northern ad westerns markets in India.
"Storage market in India is pegged at 16 to 17 percent growth year-on-year. SME spend on storage is a mere 6 to 7 percent. We expect it to go up to 40 percent," Sen said.
NetApp Data Explosion SurveyThe Data Explosion survey is being conducted by The Nielsen Company in association with NetApp to substantiate the data growth in organizations in India. The survey aims to establish the challenges faced with respect to storage and data management and how organizations are dealing with these challenges.
The SME segment comprises 242 companies from across Mumbai, Bangalore, Delhi, Hyderabad, Chennai and Pune across BFSI, Media & Entertainment, IT/ITES, Automotive, Manufacturing, Pharma and Healthcare.
Source : CIOL
NetApp, leading provider of innovative data management solutions, today announced the interim findings of its ongoing survey titled 'Data Explosion in India - Trends & Challenges' in partnership with The Nielsen Company.
SMEs in India are heading towards a data deluge within a year's time between now and 2009-10. According to the survey, there is a clear indication of rapid increase in storage requirements in the SME segment. There will be a 56 percent growth in SMEs whose data storage requirements will jump to the 500-999 GB range from the 100-499 GB range.
Further, there will be a 133 percent growth in SMEs whose data storage requirements will increase in the 6-10 TB range. This shift in increase in storage requirements is also reflected by a corresponding drop by 29 percent of SMEs between 100-499 GB range and a 60 percent drop in the >100 GB range.
In addition, there is expected to be a 33 percent growth in SMEs demanding storage in the 11-15 TB, and >25 TB ranges respectively, which is a huge data management challenge coming up for SMEs.
NetApp launches storage solutions for SME marketOwing to the huge potential in the Indian SME market, NetApp also announced the complete integration of the S Family of storage solutions, formerly known as StoreVault, into its full line of storage and data management solutions for the midsized segment at an entry-level price.
The S550, with 12TB, caters to small businesses with 100 to 500 employees while the FAS 2020, with 68 TB, fits mid-sized business with 250 to 750 employees.
"The report findings clearly indicate that the SME market in India is growing rapidly, which is reflecting in their data storage requirements. The integration of the S family into NetApp's full line of storage and data management solutions has happened at the most appropriate time for us considering the robust growth in the SME segment. The S Family will offer SMEs in India a new world of solutions especially designed for their evolving needs," said Surajit Sen, director, Channel, Alliances & Market, NetApp India.
"The survey revealed that data management was a genuine concern of SMEs. Hence our storage technology would help all the data management concerns of Indian SMBs," he said. "24/7 access is critical for SMEs."
NetApp's S Family of storage solutions finds demand among micro verticals including the telco segment, that offer value added services like ring tones and gaming to customers, says Sen. "This technology is a natural fit to Telcos, smaller banks, small manufacturing, healthcare and auto ancillary organizations."
The S Family products gets integrated with other solutions - in all, acts as a bundled solution including data back-up and data de-duplication. To start with, NetApp will be targeting Class B and Class cities in the south like Cochin, Salem, Coimbatore, Vijayawada and others before moving on to eastern, northern ad westerns markets in India.
"Storage market in India is pegged at 16 to 17 percent growth year-on-year. SME spend on storage is a mere 6 to 7 percent. We expect it to go up to 40 percent," Sen said.
NetApp Data Explosion SurveyThe Data Explosion survey is being conducted by The Nielsen Company in association with NetApp to substantiate the data growth in organizations in India. The survey aims to establish the challenges faced with respect to storage and data management and how organizations are dealing with these challenges.
The SME segment comprises 242 companies from across Mumbai, Bangalore, Delhi, Hyderabad, Chennai and Pune across BFSI, Media & Entertainment, IT/ITES, Automotive, Manufacturing, Pharma and Healthcare.
Source : CIOL
It’s time for SMEs to tap carbon finance
Market-based incentives for additional greenhouse gas emission reductions for project activities offer new opportunities in developing countries. The revenue from Clean Development Mechanism (CDM) projects can ensure financial viability of energy conservation and cost reduction measures in many industries. Carbon credits generation activity is growing at 80% in India. Though India has the highest number of registered CDM projects in the world, CDM has yet to become popular among small and medium enterprises (SMEs).
The number of Indian SMEs participating in CDM is small. It constitutes only around 5% of the total registered CDM projects in India. SMEs’ contribution is more than 50% of industrial production in India. Going by its value added figures in the manufacturing sector, it makes for one-third of total exports and employs the largest manpower next to agriculture.
With more than three million SMEs, this sector contributes 40% towards the GDP, provides employment to more than 22 million people and is growing at a rate of 20% annually. The wider role of SMEs in the economy and their potential to reduce GHG emissions through energy efficiency and other measures at a marginal cost make them ideal for CDM activities.
SMEs can immensely benefit from carbon cash flows. CDM can provide incentives to SMEs to adopt new and more efficient technologies, improve energy and environmental performance, and help them access finance at low costs.
Benefits from potential carbon revenue streams could be significant in raising the equity component of financing their modernisation. Energy efficiency, which enables flow of carbon revenue in the segment, will not only enhance their environmental quality but will also make the working environment better. Increasing the SME participation in CDM is very critical to achieve desired modernisation and cost competitiveness in the segment. A strategic approach needs to be formulated to leverage carbon finance to strengthen SMEs and their future potential in contributing to the Indian economy and making the economic growth more inclusive.
Since the SME participation to date is not very encouraging, a little effort to create a CDM-enabling environment in this sector could lead to harnessing its latent potential. The units in food processing and agri-industries—sugar, distilleries, meat/fish processing, diaries, poultries, starch, jute and steel rolling mills, ferro alloys, sponge iron and foundries—have excellent opportunities to generate additional revenue flows to enable modernisation and cost efficiency. The participation of SMEs in harnessing this mechanism is slack due to the lack of awareness, affordability of transaction costs and uncertainties in the CDM process and consequent risks.
At present, the sugar industries are active and are developing several CDM projects. At least 15 sugar mills have got successfully registered and a few among them have received carbon revenue flows. Their number can increase manifold with effective intervention by public and private bodies—especially financial institutions, the government and project development entities/consultants.
There are several cost effective indigenous technologies that reduce fuel consumption in boilers and thereby the carbon emission. For example, there are indigenously developed multifunctional fuel additives for petroleum fuels and solid fuels like coal, lignite, bagasse and biomass. Usage of such technologies can result in reduction in fuel consumption by 2-6% and in case of brick kilns, the reduction in coal consumption can be 10-15%. Such additive and emulsifier suppliers can make their business proposition more attractive to customers by using carbon revenue stream or generating upfront debt or equity finance.
In India, the brick industry is still a highly energy-intensive process. The annual estimated coal consumption in the brick industry is nearly 24 million tonne, which forms about 8% of the total coal consumption in India. The share of fuel in the total production cost of bricks is in the range of 35-50%. There are significant opportunities for improving the energy efficiency of the brick production sector. A balance use of energy with some improvements in existing technologies can reduce the sector’s energy usage by 5-15%.
The share of India’s textile industry in its GDP is nearly 5%, and the export earning from the sector is around 25% of the total value of exports from India. There are about 2,000 cotton and man-made fibre textile units in the country. Energy accounts for 12-15 % of the total cost of production in the sector. Up to 75% of energy is utilised in wet processing with temperatures ranging from 40°-140°C. Any initiative that would lead to a reduction is the use of fossil fuel by replacing it with alternative renewable energy sources would earn carbon credits.
The major reason behind the low participation of SMEs is lack of awareness about CDM and carbon abatement opportunities. Further, the kind of costs involved in structuring a green initiative as a CDM project make one look at it as a challenge and the volume of operations in SMEs makes the CDM structuring process apparently unviable.
A new approach introduced by UNFCCC, called programmatic CDM, provides an enabling environment for energy service companies to emerge and aid SMEs to participate in implementing CDM projects. Programmatic CDM can be seen as an attempt to lower transaction costs of the CDM process to bring in the emission reduction opportunities in small and tiny sectors into the carbon market.
This new initiative by the UN body enables emergence of new entities (called energy service companies) to finance and undertake initiatives particularly for renewable energy and energy efficiency projects in small and tiny sectors, which are marginalised in a CDM market dominated by high-yield, low-cost projects.
A clear road map needs to be prepared by the government and trade organisations to create a strong awareness of CDM and its benefits among SMEs. An appropriate policy for promotion of energy service companies (CDM project bundlers and CDM programme implementers), articulation of carbon credit ownership issues and some fiscal incentives will definitely make significant difference in achieving the higher participation of SMEs in India.
Source: Financial Express
The number of Indian SMEs participating in CDM is small. It constitutes only around 5% of the total registered CDM projects in India. SMEs’ contribution is more than 50% of industrial production in India. Going by its value added figures in the manufacturing sector, it makes for one-third of total exports and employs the largest manpower next to agriculture.
With more than three million SMEs, this sector contributes 40% towards the GDP, provides employment to more than 22 million people and is growing at a rate of 20% annually. The wider role of SMEs in the economy and their potential to reduce GHG emissions through energy efficiency and other measures at a marginal cost make them ideal for CDM activities.
SMEs can immensely benefit from carbon cash flows. CDM can provide incentives to SMEs to adopt new and more efficient technologies, improve energy and environmental performance, and help them access finance at low costs.
Benefits from potential carbon revenue streams could be significant in raising the equity component of financing their modernisation. Energy efficiency, which enables flow of carbon revenue in the segment, will not only enhance their environmental quality but will also make the working environment better. Increasing the SME participation in CDM is very critical to achieve desired modernisation and cost competitiveness in the segment. A strategic approach needs to be formulated to leverage carbon finance to strengthen SMEs and their future potential in contributing to the Indian economy and making the economic growth more inclusive.
Since the SME participation to date is not very encouraging, a little effort to create a CDM-enabling environment in this sector could lead to harnessing its latent potential. The units in food processing and agri-industries—sugar, distilleries, meat/fish processing, diaries, poultries, starch, jute and steel rolling mills, ferro alloys, sponge iron and foundries—have excellent opportunities to generate additional revenue flows to enable modernisation and cost efficiency. The participation of SMEs in harnessing this mechanism is slack due to the lack of awareness, affordability of transaction costs and uncertainties in the CDM process and consequent risks.
At present, the sugar industries are active and are developing several CDM projects. At least 15 sugar mills have got successfully registered and a few among them have received carbon revenue flows. Their number can increase manifold with effective intervention by public and private bodies—especially financial institutions, the government and project development entities/consultants.
There are several cost effective indigenous technologies that reduce fuel consumption in boilers and thereby the carbon emission. For example, there are indigenously developed multifunctional fuel additives for petroleum fuels and solid fuels like coal, lignite, bagasse and biomass. Usage of such technologies can result in reduction in fuel consumption by 2-6% and in case of brick kilns, the reduction in coal consumption can be 10-15%. Such additive and emulsifier suppliers can make their business proposition more attractive to customers by using carbon revenue stream or generating upfront debt or equity finance.
In India, the brick industry is still a highly energy-intensive process. The annual estimated coal consumption in the brick industry is nearly 24 million tonne, which forms about 8% of the total coal consumption in India. The share of fuel in the total production cost of bricks is in the range of 35-50%. There are significant opportunities for improving the energy efficiency of the brick production sector. A balance use of energy with some improvements in existing technologies can reduce the sector’s energy usage by 5-15%.
The share of India’s textile industry in its GDP is nearly 5%, and the export earning from the sector is around 25% of the total value of exports from India. There are about 2,000 cotton and man-made fibre textile units in the country. Energy accounts for 12-15 % of the total cost of production in the sector. Up to 75% of energy is utilised in wet processing with temperatures ranging from 40°-140°C. Any initiative that would lead to a reduction is the use of fossil fuel by replacing it with alternative renewable energy sources would earn carbon credits.
The major reason behind the low participation of SMEs is lack of awareness about CDM and carbon abatement opportunities. Further, the kind of costs involved in structuring a green initiative as a CDM project make one look at it as a challenge and the volume of operations in SMEs makes the CDM structuring process apparently unviable.
A new approach introduced by UNFCCC, called programmatic CDM, provides an enabling environment for energy service companies to emerge and aid SMEs to participate in implementing CDM projects. Programmatic CDM can be seen as an attempt to lower transaction costs of the CDM process to bring in the emission reduction opportunities in small and tiny sectors into the carbon market.
This new initiative by the UN body enables emergence of new entities (called energy service companies) to finance and undertake initiatives particularly for renewable energy and energy efficiency projects in small and tiny sectors, which are marginalised in a CDM market dominated by high-yield, low-cost projects.
A clear road map needs to be prepared by the government and trade organisations to create a strong awareness of CDM and its benefits among SMEs. An appropriate policy for promotion of energy service companies (CDM project bundlers and CDM programme implementers), articulation of carbon credit ownership issues and some fiscal incentives will definitely make significant difference in achieving the higher participation of SMEs in India.
Source: Financial Express
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