The Rental Business of Test and Measurement Equipment Is Slow, But It Is The Way To Go

    People in the industry know that Test and Measurement equipment are an expensive investment. And the pace of the evolution of technology, makes them a rather risky investment as well. Enter Livingston India, that lets its customers to rent the equipment for their needs at much lower costs. To further proliferate into the market, the company opened a state of the art centre of excellence for testing equipement in Bengaluru. ELE Times’ Soumyarendra Barik talked to Shailendra Kalra, Director at Livingston India about the new lab, and the Indian market in general. Excerpts:

    Soumyarendra Barik: How has been your experience been so far in the Indian market, especially after the merger with Microlease.

    Shailendra Kalra: The merger only added more steam. As Livingston, our core focus area was always telecom. After Microlease came on board, our inventory more than doubled. And we were also able to provide inventory to other segments like RF, semiconductors, high speed digital, aerospace, and that of course gave us a major boost. To summarise, the coming together of two companies, only gave us more strength not only in terms of our reach, but also in terms of the new markets and our inventory.

    Soumyarendra Barik: What are Livingston’s key markets in India and how did you perform in them?

    Shailendra Kalra: Apart from the telecom sector, the other sector that we serve in now is R&D. R&D more in the RF side, and also in the semiconductor, and high speed digital side. Telecom as a market itself has been a bit jittery. But for us, that hasn’t had much of an effect. I won’t say the telecom market has been bad for us, but yes, it hasn’t really performed to our expectations. But in the meantime, due to our inventory strength in other domains, they have picked up really well. We are well established in the Bengaluru, Hyderabad, and Chennai region and we are catering to all Tier one, two, and three players, mostly for pre and post silicon testing validation.

    Soumyarendra Barik: Talking particularly of the Test and Measurement sector, how has your rental market performed?

    Shailendra Kalra: India from a rental market standpoint is at very nascent stage. The adoption rate for rental has been slow. It’ll continue to be slow, but it will steadily grow. When I joined Livingston in 2012, the telecom was not very receptive of renting equipment. But now they understand that it doesn’t make sense to invest CAPEX in technologies that are constantly becoming obsolete. And that is exactly what the scenario is now in the ESDM segment. Where the value of the equipment is actually very high and the technologies are evolving too fast. These trends tell us that the market for rental equipment is growing slowly but steadily. In short, it’s picking up, it’s slow; but rental is the way to go.

    Soumyarendra Barik: Bigger companies have the finances to buy equipment. Not so much the case with MSMEs and SMEs. What do you have on offer for them?

    Shailendra Kalra: As of now, we’re only catering to them with rental equipment for their testing purposes. From a week to a month to a year, they can make use of the technology that they need for their testing purposes. That is exactly why we are coming up with the new lab in Bengaluru. Starting from an hour, going up to a day, to a year, people can walk in to the lab and make use of the equipment in our new lab. It is our way of proliferating into the market further.

    Soumyarendra Barik: Now, Livingstone deals in leasing Test and measurement equipment. Naturally then, you buy them from manufacturers. However, isn’t there a contradictory business model here? After all, if you do well, the manufacturers won’t sell much as people would rather rent than buy.

    Shailendra Kalra: Not really. When we do well, we buy more from them. Look at this way: If there are hundred odd companies who have the requirement but not the CAPEX to buy the test equipment, what do they do? And if they are not able to do anything it, the OEMs are not going to get that business.  With us in the picture, there is a possibility for the OEMs to sell those boxes to us. And eventually, our business model enables these smaller companies to get their hands on that equipment. So, I don’t see this as a contradictory business model. In fact, when they do well, we do well.  And when we do well, they do well.

    Soumyarendra Barik: We know that India is a completely different market than a China or a Germany in terms of perceptions and aspirations. So, what have been the biggest challenges so far in this market that is in constant flux?

    Shailendra Kalra: I’d say, the biggest challenge has been the change of mind set. Engineers always like to own equipment. There is an emotional quotient which is very high there. That’s why I said that rental is growing slowly. I don’t think India has posed a different challenge than any other market would have posed if it was at this particular stage.

    Soumyarendra Barik: You’ve constantly been saying that rentals is the way to go. I think it would be safe to assume that you mean rentals are the future. In the backdrop of your new lab in Bengaluru, what do you reckon of Livingston’s future in the Indian market?

    Shailendra Kalra: Rental has been our core business. And I would yet again reiterate, rental is still at very nascent kind of a stage. So, rentals will continue to grow. Apart from that, we are opening up a test centre of excellence in Bengaluru, where we are offering testing as a service, so it’s another market proliferation strategy. Now we are looking at the lower end of the pyramid. If startups, MSMEs, and SMEs need any kind of testing equipment at an affordable price, we would be there for them. Also, bigger companies who own massive assets, have come to realise that the life cycle of products is going to shorten. Obsolescence rates have become very high. Capital involved is high. So even these companies are now opting to rent equipment. So you can say, that in a way, we would be doing asset management for these companies. You will see that rentals will keep growing, our lab will proliferate the market further, and asset management will actually be the umbrella service that will cover up both.

    Soumyarendra Barik: Since you sound so optimistic about the new lab in Bengaluru, I think we can agree to the fact that it is just the start. And we can hope to see more such labs popping up in other areas of the country.

    Shailendra Kalra: Absolutely. This is not a one-off. The way I see it is that we’ve been a catalyst to the whole Make in India and Design in India movement. The government has taken some initiatives because of which, the startup culture has developed in the country. These startups need support aprt from everything else, also in the test and measurement domain. And we are there to support. Whether it through rentals or through testing as a service, or asset management, we will continue doing this and continue growing.

    Soumyarendra Barik: What is that one service in your new lab that you would like our readers to know?

    Shailendra Kalra: As I said before, you can come to our lab and use the products on offer for one day, one week, one month, or one year. There is no commitment in regards to the time frame. So depending on a person’s needs, big or small, you can walk into the facility and use the equipment and pay as you go.

    Shailendra Kalra
    Shailendra Kalra, Director at Livingston India
    ELE Times Bureau
    ELE Times Bureau
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