Top10 Vendors: 4 - Cisco: Cementing Growth

Networking major Cisco Systems India's surging revenue in the country is fuelled by its reinstated commitment to its customers, channel partners, increased focus on R&D and investments in markets in which it operates.

And the distinctive approach has Cisco's revenues FY '06-07 rose to Rs 4,037 crore from Rs 3,178 crore, clocking 27% growth. Cisco had 80% market share in the core routing and switching segments. Customer satisfaction for third party and partners improved as compared with the previous years. Focus on the government and defense verticals have assisted Cisco in maintaining growth. In the SMB segment, focus was on classical manufacturing, banking and finance, and IT/ITeS.

It's still the undisputed leader in a number of key sectors, and several factors can be attributed to the numero uno position. R&D focus was at its peak for Cisco, which has also made substantial investments in acquisitions, recognized Indian market potential and committed more for the Indian market, wherein it introduced new products.

FY '06-07 also saw two key appointments-Jangoo Dalal as president of its India and SAARC region, and Wim Elfrink as chief globalization officer. With Elfrink's appointment, India has become the globalization center for East.

One of the key investments of Cisco was in Nuova Systems, where it has committed $50 mn of funding with the possibility of up to $42 mn in additional funding.

To grab more market share and customer confidence, Cisco, which is focusing on enterprises and service providers, said it was on course with its $1.1 bn investment in India that it announced in October 2005 and is expanding its commitment to its initiative in India. The company also expects to triple its workforce in India over the next three to five years.

AREA OF OPERATION: Networking products and services
Address: Cisco Systems India
IL&FS Financial Centre
6th Floor, C 22, G Block, Bandra-Kurla Complex
Bandra East, Mumbai 400 051
Tel: +91 22 40434028
Fax: +91 22 26533703
website: www.cisco.com/global/in

Highlights

Strengthening R&D focus
Started manufacturing in India through Foxconnn
Acquisitions to power innovations
Selected India as the globalization center
Increased thrust on SMBs
Ensured 80% share in core routing and switching market

Innovation has always been at the core of Cisco's engineering and development efforts. Linksys, a division of Cisco Systems, unveiled its iPhone family of VoIP solutions.

Besides this, Cisco announced further enhancements to its IP next-generation network architecture designed to enable the development and delivery of business services with predictable performance.

Demonstrating its commitment to help transform isolated security operations into a strategic asset using the IP network, Cisco also announced key additions to its IP-based video surveillance product portfolio.

Cisco Systems, which has bagged a number of key deals, was selected by GATI, the leader in the express cargo industry in India, to integrate WAN that connects over 400 locations across the country for running centralized web-based applications.

'The government and defense verticals are huge contributors'

How would you rate Cisco's performance in FY '06-07?
2006-07 was a good year for Cisco India as well as globally. Revenues grew by around 30%. Core routing and switching had 80% market share.

In terms of customer satisfaction for third party and partners it was much better than the previous year. Partner satisfaction also grew. Both top line as well as bottom line has also shown healthy growth, and attrition is at around 3%. In unified communications, customers are appreciative about technology, and in security the market share has grown by 40%. In network storage, data center is a new business for us and has done good numbers.

Jangoo Dalal

president, India and SAARC

Cisco has selected Foxconn to manufacture in India-when do we see 'made in India' products?
EMS is a global strategy for us. We complete design, develop, and incubate. And manufacturing and quality is all EMS. Foxconn is our largest EMS. Manufactured products are already in the market and Foxconn is initially manufacturing IP telephony products. We have started with baby steps and IP telephony has huge upsurge and demand and we are quickly ramping up. We will learn from this and then switch to routing and switching.

The government and defense verticals have contributed hugely to Cisco's revenues. What is the reason for this?
Government and defense have been our star attractions, contributing hugely to growth. It is also a reflection of the spend the government is doing on IT and networking. This is fortunate. We continue to grow on the SWAN front as we are putting in place the basic network for e-Governance. And we bring the whole package in terms of best technology, price, and value proposition.

Fundamentally, defense has helped us and we have lazer sharp focus on this factor as decision taking is pretty long. We have worked from the conceptual stage and brought learning from across the globe. We have helped our forces to leapfrog to the latest technology and also gain from our cumulative global experience.

How do you see SMB as a market for Cisco India? Have you been able to perform as per expectations?
It was a phenomenal year for SMB. We made products for SMB by not downsizing our enterprise products but appropriate products by serving them easy access to call center, help desk, and reorienting strategy. We are focusing on 65 cities across the length and breadth, and in FY '07-08 we are planning for 100 cities, making products available and partners trained in smaller cities.

SMBs have done well and even in FY '07-08 overall growth will be driven by them. Here, the focus has been on classical manufacturing, banking and finance, and IT/ITeS. In 2007-08 there will be opportunity in sub-segments like manufacturing, enterprise sub verticals, and manufacturing.

Cisco has crossed $1 bn in May 2007. What's the next target?
Our outlook for business in India is bullish like never before. The constellations are aligned for us and so is the economy. All corporates are gaining rapidly and have global ambitions, and are competing globally. Our aspiration is to continue to grow twice as fast as the industry growth.

Its association with the IIT�Roorkee, for advanced research on mobile agent technology, is also one of the key developments in India.

Cisco also announced aggressive plans to address the needs of the SMB segment in India. The company unveiled Network On Wheels, a mobile showcase of customized Cisco networking solutions including advanced technologies such as security, wireless and unified IP communications aimed at helping Indian SMBs to leverage the power of the networking technology for business growth.

The Indian economy is on a roll and Cisco will continue to thrive in the coming years.

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