1. We’re shifting some manufacturing to India: Patrick Lo, Netgear

We’re shifting some manufacturing to India: Patrick Lo, Netgear

Patrick Lo, chairman & CEO, who co-founded Netgear, was in India recently for a market review.

Published: November 7, 2014 1:23 AM

NETGEAR is a Silicon Valley-based multinational that makes networking, storage, security, and digital media products for businesses and home consumers. The company is present in 26 countries, and its products are sold in about 29,000 retail locations around the globe. In India, Netgear is present in 14 cities, and plans are afoot to take this number to 28 in three years. Patrick Lo, chairman & CEO, who co-founded Netgear, was in India recently for a market review. He spoke to FE’s Verghis Chandy about the company’s
India plans. Excerpts:

What takes you to India now?
Well, I come twice a year here. India is one of the fastest growing markets for Netgear. We see still a lot of growth potential here, because the economy is developing very well. So it’s good for me to talk with the local team to know how much more we can do, and look at the IT landscape and trends.

How does the Indian IT market compare with the developed world markets?
I think, Indian consumers and businesses are keeping up with the technology very well, but in their own unique cost effective way of doing it. It’s not surprising since Indians are supporting a lot of IT technology. We see technology as a triangle; Silicon Valley, Tel Aviv and Bangalore. Most technology companies have linkages and presence around  these three places. But India has its own unique way of bringing IT and latest technology to the common people, in a very cost-effective way. That fits exactly with Netgear’s philosophy. We think it is important to connect the masses to the internet, but it has to be done in an affordable and simple way.

How important is the SMB market for your company?
We’re specially focused on the small and medium business, because we believe that at this time too many companies are focusing on the big enterprises. But there are not many really high quality networking companies targeting SMBs. So we feel there is a mission for us to accomplish, to bring the latest technology to SMBs in a simple and cost effective way, so that that they can keep up with the latest technology without breaking their bank.

What has been your experience with small and medium businesses?
In many countries, in technologies like switching, storage and wireless for small and medium businesses, if we’re not No. 1 then No 2, and we’re seeing the acceptance of our products in India, especially in switching and storage. We would like to see a little more progress in wireless LAN, which we plan to do in a while. We’ve been in India for more than 12 years. That way, we’re the most committed IT networking company in the SMB market in India. Over the last 12 years, we’ve never wavered in giving the the highest value proposition to our customers, by not giving low quality products. That’s a model that has worked for us in many markets and we think that could work in India as well.

Any expansion plan?
We continue to push for the expansion of our presence in many economic areas as possible in India. We have plans to double our presence to 26 cities in the next three years. At the same time, we would like to expand our investment in India by increasing our R&D presence in Bangalore. We’re looking at the possibility of shifting some manufacturing to India, like switches, routers, cameras, which are mainly manufactured in China and Taiwan.

Are you shifting from China? And why?
Yes. We’re shifting from China, because in China labour is becoming very expensive. Land is also expensive. In China, more and more manufacturing is being shifted inland to cut costs. Still labour cost is pretty uniform. So we’re looking at India. See, your new Prime Minister wants to encourage manufacturing in India. Also, an important thing, Netgear is committed to connect the masses to the internet. We believe that technology benefits people, it lifts the quality of life of the people. So wherever we go, we try to connect people to the internet. We believe that manufacturing helps lift people’s income. That’s why you see over the last 16 years a lot of difference in the quality of life in China. We believe the same could improve the livelihood of many Indian residents.

What are the challenges faced by SMBs in technology adoption?
Two things. One is complexity. Two is cost. That’s why we’re really addressing these head on. We revolutionised how network is configured, managed and monitored through browsers and graphical interface. We also made configuring a storage device easy. We take away complexity and add simplicity so that businesses won’t be afraid of using technology. The second thing is cost. We reduce cost by offering reasonably SMB-oriented features. We have tailor-made our products from the ground up to be simple to use and to be cost effective.

What does the future look like for IT?
The future is clearly about continuity in improving the speed in connecting to the internet, improving mobility and improving the power of cloud. Mobility is all about enhancing the speed of Wi-Fi, 3G and 4G. We’re upping the speed for the Ethernet, WiFi, 3G and 4G.

By Verghis Chandy

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